Asia markets slip; Nikkei falls despite above-view Q1 GDP – CNBC
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Asia markets opened lower Wednesday, with Japan’s shares wavering as traders struggled to interpret data showing the country’s economic growth beat expectations.
The benchmark Nikkei 225 index was up 0.62 percent, continuing to weave between positive and negative territories as traders were likely weighing whether the good news from the data was good or bad news for markets.
The yen, which initially also wavered in reaction to the data, signaled market displeasure, with the Japanese currency strengthening to as low as 108.70 against the U.S. dollar, compared with around 109.09 prior, before the pair rose again to 109.04 at 9:38 a.m. SIN/HK time.
Japan’s gross domestic product (GDP) for the January-to-March period grew faster than expected, with real GDP rising 0.4 percent on quarter compared with a Reuters poll forecast for 0.1 percent growth. Annualized GDP for the period grew 1.7 percent, compared with expectations from a Reuters poll for 0.2 percent growth.
The market had expected that a poor reading would spur additional easing measures from the Bank of Japan – in other words, that bad news would have been good news for traders.
DBS noted that the rise in GDP growth came as growth for October-December was revised lower, keeping aggregate output flat.
“The GDP data results are not bad enough to justify a postponement of the 2017 sales tax hike,” DBS said in a note Wednesday. “The BOJ is likely to wait for a while to see the fiscal policy details, before taking actions on monetary policy.”
Down under, the S&P/ASX 200 was down 0.17 percent, retracing Tuesday’s 0.69 percent rise, dragged by a 0.13 percent decline in the heavily weighted financials subindex. That was offset by continued gains in the energy sector, which added 1.05 percent.
Other markets were also lower. Hong Kong’s Hang Seng Index shed 1.09 percent, while on the mainland, the Shanghai Composite fell 0.72 percent and the Shenzhen Composite lost 1.33 percent. South Korea’s Kospi index shed 0.8 percent.
Markets remained wary over potential interest rate hikes from the U.S. Federal Reserve, which dented U.S. market performance overnight.
The Federal Open Market Committee is scheduled to release its April meeting minutes at 2 p.m. ET Wednesday and many analysts are concerned the minutes could be more hawkish than the statement that followed April’s meeting.
That concern got some juice from comments by San Francisco Fed President John Williams and Atlanta Fed President Dennis Lockhart, who said the Fed could still raise rates two or three times this year, according to a Reuters report.
Asia markets slip; Nikkei falls despite above-view Q1 GDP – CNBC}