FX.co ★ Asian Markets Track Wall Street Higher

Asian stock markets are primarily seeing a positive trend, following the encouraging signals from Wall Street overnight. Investors are anticipating the US Federal Reserve's monetary policy announcement on Wednesday, after the central bank's preferred inflation gauge largely matched expectations. Asian markets showed a positive close on Monday.

According to expectations, the Fed will likely maintain the current interest rates. However, the post-meeting press conference by Fed Chair Jerome Powell may provide further insights into the future outlook for these rates.

Recent economic data has muted expectations of an immediate rate cut, making it likely for the central bank to keep rates unchanged until at least September.

Australian stock market also exhibited a mild upturn on Tuesday, indicating positive cues from Wall Street overnight. The benchmark S&P/ASX 200 modestly remained above the 7,600 level. Gains in iron ore miners were partially offset by weaknesses in energy stocks. Other sectors exhibited a mixed performance.

Major miners such as Rio Tinto and BHP Group saw minor advancements, alongside Mineral Resources and Fortescue Metals showing growth of nearly 2 percent each.

Despite this, oil stocks were seen mostly on the low, with Santos losing nearly 1 percent, and Beach Energy was falling almost 2 percent. Woodside Energy and Origin Energy were also slightly down.

In the tech stock market, Afterpay owner Block and WiseTech Global were slightly declining, while Zip and Xero were gaining. Gold miners showed a mixed trend. National Australia Bank, ANZ Banking, and Westpac also showed minor advancements, while Commonwealth Bank remained unchanged.

According to economic news, the overall value of retail sales in Australia fell by a seasonally adjusted 0.4 percent in March, falling short of expectations. On an annual basis, retail sales rose by 0.8 percent.

On the other hand, the Reserve Bank of Australia reported an increase in private sector credit by 0.3 percent in March, also below expectations.

In currency markets, the Australian dollar was trading at $0.653.

The Japanese stock market was also seen making significant gains following the broadly positive cues from Wall Street overnight. Most sectors were seen boosted, with exporters and index heavyweights leading the way. The major exporters, Panasonic and Sony, were seen to be on the rise with advertisers Advantest, Tokyo Electron, and Screen Holdings showing advancements. Several banks also noted growth with Mitsubishi UFJ Financial being a key gainer.

On the contrary, M3 has seen a sharp decline of over 9%, while Oriental Land and Nitto Denko have each experienced a decrease of over 7%. Seiko Epson is recording nearly a 4% drop, while CyberAgent and ANA Holdings have both dipped over 3%. Both TDK and Kikkoman are down by almost 3%.

Moving on to economic news, Japan's retail sales value witnessed a seasonally adjusted drop of 1.2% in March, as per the announcement of the Ministry of Economy, Trade and Industry (METI) on Tuesday - totaling 14.691 billion yen. Annually, they saw a 1.2% increase, while in comparison to February, sales rose by 1.7% monthly and by 4.7% annually. In the first quarter of 2024, the sales recorded a flat quarter-on-quarter, but an annual increase of 2.6%, amounting to 40.753 billion yen.

Further, the METI released information regarding Japan's industrial production, stating an increase of 3.8% in March, higher than the anticipated increase of 3.4% after a decrease of 0.6% in February. However, the annual industrial output dropped by 6.7% following a decrease of 3.9% the previous month. Reacting to these numbers, the METI revised its evaluation of industrial production, indicating it as inconsistent and weakened. According to forecasts by METI, the output is expected to rise by 4.1% in April and 4.4% in May.

In regards to unemployment, the Ministry of Internal Affairs and Communications reported a seasonally adjusted rate of 2.6% in March, unchanged from February, but higher than the expected 2.5%. The job-to-applicant ratio was 1.28, surpassing the expected 1.26 and unchanged from the previous month. The participation rate remained unchanged at 62.8%.

In foreign exchange news, the U.S. dollar is trading at a higher rate in the 156 yen-range on Tuesday, with the yen near its lowest level since 1990 against the dollar.

Across Asia, China, South Korea, Hong Kong, Singapore, Indonesia, and Taiwan have each seen increases between 0.1% and 1.0%, while New Zealand and Malaysia have remained relatively stable.

Over on Wall Street, Monday saw further gains following the strong upward trends from last week. The Dow rose 146.43 points (0.4%) to 38,389.09, the Nasdaq climbed 55.18 points (0.4%) to 15,983.08, and the S&P 500 advanced 16.21 points (0.3%) to 5,116.17.

In other European markets, the FTSE 100 Index in the UK saw a marginal gain of 0.1%, while the indices of Germany (DAX) and France (CAC 40) fell by 0.2% and 0.3% respectively.

Lastly, the concern over growth and demand outlook for oil, coupled with the rising possibility of the Federal Reserve delaying interest rate cuts, led to a decrease in Crude oil prices. West Texas Intermediate Crude oil futures for June ended down $1.22 or 1.45% at $82.63 a barrel.