Asian markets experienced mixed results on Monday as investors awaited the upcoming Federal Reserve meeting after Wall Street’s strong performance last week. U.S. futures were up, while oil prices took a dip. Japan’s main index closed 1.8% lower following a decline in core machinery orders, hinting at potential weakening in capital spending over the next few months.
The U.S. dollar fell against the Japanese yen amid speculation of a rate cut by the Fed in September. Last week, positive U.S. retail sales data boosted market sentiment regarding potential interest rate adjustments, influencing the dollar-yen exchange rate. The ongoing uncertainties in the global economy, weak U.S. job data, and signals from the Federal Reserve were cited as factors contributing to recent foreign exchange market volatility.
All eyes are on Federal Reserve Chair Jerome Powell’s speech in Jackson Hole, Wyoming, with expectations of possible hints about the central bank’s future monetary policy direction. The market is particularly interested in whether the Fed aims to stimulate economic growth through rate cuts or maintain the current momentum.
In other parts of Asia, Australia’s S&P/ASX 200 rose slightly, while the Kospi in Seoul and Bangkok’s SET saw declines. Hong Kong’s Hang Seng and Shanghai Composite recorded gains. Meanwhile, the S&P 500, Dow Jones Industrial Average, and Nasdaq composite in the U.S. all made modest gains.
The bond market experienced fluctuations following mixed reports on the U.S. economy, with one report indicating a slowdown in homebuilding activities. However, an optimistic consumer sentiment report countered these concerns, suggesting ongoing faith in the economy despite potential growth challenges.
Market analysts are closely monitoring the impact of rising interest rates and the possibility of an economic slowdown. The anticipation of a rate cut by the Fed in September is seen as a measure to prevent a possible recession. Yields on 10-year and two-year Treasury bonds eased slightly, reflecting market expectations around Federal Reserve actions.
In energy markets, U.S. crude oil prices dropped slightly, and the international standard Brent crude also experienced a decline. The euro strengthened against the U.S. dollar, reaching $1.1042 on Monday.
