Asia Pacific Stocks Rose as Investors Loose Reflation Trades

On Friday morning, June 18, Asia Pacific stocks rose as investors loosen some of the reflation trade.

In Japan, the Nikkei 225 climbed 0.31%. This is due to the Bank of Japan (BOJ) releasing its monetary policy decision later in the day.

Investors widely anticipated that the BOJ would keep its massive stimulus firmly in place.

Also, it is expected to extend the deadline for its coronavirus relief program.

Both of these indicate that the nation’s weak economic recovery and the offhand inflation translate to any exit from the current ultra-easy policy.

Earlier in the day, the Japanese government released the national core consumer price index which surged 0.1% year on year.

Furthermore, China’s Shanghai Composite Index and Shenzhen Component were both up by 0.10% and 0.69%, respectively.

On Thursday, the US Federal Communications Commission made a 4 to 0 vote in banning the products of Huawei Technologies Co and four other Chinese electronics firms.

In addition, Hong Kong’s Hang Seng, South Korea’s KOSPI, and Australia’s ASX 200 all jumped 0.76%, 0.17%, and 0.42%, respectively.

Meanwhile, in the US, the Treasury yields were steady earlier in the session.

On Thursday, yields sank due to the Federal Reserve’s policy decision this week that the tightening will start sooner than expected.

The central bank left investors in awe, indicating that it is ready to start discussing the tapering of assets.

Also, the Fed will likely raise interest rates with two hikes planned in 2023.

Still, some investors are debating the Fed’s timeline on when it will start to trim its monthly bond purchase.

However, the decision helped to reduce recent worries regarding hyperinflation.

Japan Stock Movements

As a flashback on Thursday’s close, Japan stocks losses in the Paper & Pulp, Railway & Bus, and Real Estate sectors.

Due to this, Nikkei 225 lost 0.93% yesterday before it rallied today.

The session’s best performers were T&D Holdings, Inc, Z Holdings Corp, and Dai-ichi Life Holdings Inc which all rose 3.11%, 2.67%, and 2.54%, respectively.

Meanwhile, the worst performers were Komatsu Ltd, Chugai Pharmaceuticals Co Ltd, and Takara Holdings Inc which all fell 5.25%, 3.74%, and 3.48%, respectively.

These falling stocks outperformed the advancing firms on the Tokyo Stock Exchange by 2247 to 1237 while 256 closed unchanged.

Briefly, the Nikkei Volatility, which gauges the implied volatility of Nikkei 225 options stayed at 18.10.