Mixed trading, BoJ’s Ueda boosts JPY

• Most Chinese equities trades in positive territory amid the sign of an easing of deflationary pressures in China.
• Bank of Japan (BoJ) Governor Kazuo Ueda stated that the central bank will now be on “a quiet exit.”
• Market players await the US Consumer Price Index (CPI) data for August.

Asian stock markets trade mixed on Monday ahead of the US key inflation data. Market players will take cues from the US Consumer Price Index (CPI) data on Friday after the upbeat Labor data last week convinced the higher-for-longer interest rate narrative in the US.

At press time, China’s Shanghai surges 0.57% to 3,134, the Shenzhen Component Index is up 0.44% to 10,326, Hong Kong’s Hang Sang falls 1.68% to 17,896, South Korea’s Kospi gains 0.06% and Japan’s Nikkei is down 0.55%.

Most Chinese equities trades in positive territory amid the sign of an easing of deflationary pressures in China. However, Hong Kong’s Hang Seng Index led to losses as investors worried about the property sector crisis. The National Bureau of Statistics revealed on Saturday that the Chinese Consumer Price Index (CPI) for August came in at 0.1% YoY versus a 0.3% drop in the previous reading, a worse-than-expected 0.2% rise. The monthly figure came in at 0.3%, as expected. Finally, the Producer Price Index (PPI) declined 3.0% YoY from a 4.4% drop in July and in line with estimates.

In Japan, the Japanese Yen (JPY) is firmer and the benchmark 10-year Japanese Government Bond (JGB) yield hit the highest level since January 2014. Bank of Japan (BoJ) Governor Kazuo Ueda stated in an interview on Monday that the central bank will now be on “a quiet exit,” as the BOJ seeks to avoid any major impact on the market. Policymakers also said that the BOJ would have sufficient evidence by the end of the year to evaluate whether interest rates should stay negative.

Market participants await the release of the US Consumer Price Index for August and Retail Sales on Wednesday and Thursday, respectively. Also, the Chinese Retail Sales and Industrial Production data due on Friday might trigger volatility in the market.