TOKYO: Markets across Asia rose on Monday as investors focus on a string of key central bank meetings, and after the new head of China’s new market regulator hinted at more action to support volatile mainland bourses.
The Bank of Japan started a two-day meeting Monday, while the Federal Reserve and Bank of England also gather this week.
Markets are keen to see if Japanese policymakers unleash fresh stimulus, after launching a widely-panned negative interest rate policy in January, while the Fed talks will be watched for clues about a possible timeline for more rate hikes.
The meetings come after the European Central Bank last week cut rates and boosted its bond-buying in a bid to kickstart the tepid eurozone economy.
“Central banks are going to be dominating market sentiment,” Matthew Sherwood, head of investment strategy at Perpetual Ltd in Sydney, told Bloomberg News.
“That could be enough for the risk rally to continue, but I think it is starting to run out of steam.
“The Fed is going to be front and center” this week, he said.
Tokyo’s benchmark Nikkei 225 index finished 1.74 percent higher, Sydney gained 0.37 percent, Seoul edged up 0.04 percent, while Singapore, Wellington, Manila, Jakarta and Taiwan were also higher.
Hong Kong rose 1.18 percent in afternoon trade and Shanghai tacked on 2.33 percent, despite more evidence of a slowdown in China’s economy—the world’s second-largest and a key driver of global growth.
In the first two months of the year, output at China’s factories, workshops and mines was the weakest since the global financial crisis, official figures showed Saturday.
But Chinese shares got a lift Monday after the new head of China’s stock-market regulator said at the weekend that the state would intervene “if the market is not working properly at all or continues to fall”.
“It will be too early to talk about withdrawing” state support for stocks “for rather a long time into the future,” Liu Shiyu said.
Japanese shares got a boost after a rare bit of good news for the world’s number three economy.
Machinery orders—a key leading indicator for the economy—jumped 15.0 percent on a monthly basis in January.
The upbeat data could affect the Bank of Japan’s decision on whether or not to usher in new stimulus after it wraps up its meeting on Tuesday.
In January, Japan’s central bank shocked markets with an unprecedented move to negative interest rates but that was widely panned as a desperate attempt to prop up Tokyo’s faltering bid to kickstart growth.
“It is a delicate time in global markets as we witness a potentially significant change in major central bank dynamics,” Angus Nicholson, a market analyst at IG in Melbourne, wrote in a commentary.
“In the short term there is a high likelihood that the Fed may choose a significantly more hawkish tone this week as they want markets to be awake to the potential for another rate rise.”
Market sentiment also got a boost as an International Energy Agency report late last week said falling oil prices “might have bottomed out.”
But oil dipped in Asia Monday on profit-taking following last week’s rise and Iran’s move not to join a proposed output freeze by crude producers.
US benchmark West Texas Intermediate (WTI) for delivery in April was down 21 cents to $38.29 and Brent crude for May was down four cents at $40.35.