Hang Seng Index Soars on PBoC Policy Moves, Mainland Property and Tech Stocks Surge
Tokyo Inflation Weakens BoJ Rate Hike Expectations
On Friday, September 27, inflation figures for Tokyo impacted investor bets on a Q4 2024 Bank of Japan (BoJ) rate hike. Tokyo’s Consumer Price Index, excluding food and energy, increased by 1.2% year-on-year in September, mirroring August’s rate. Significantly, underlying inflation remained well below the BoJ’s 2% target, reducing bets on a Q4 2024 rate hike.
Falling bets on a BoJ rate hike drove USD/JPY demand. The USD/JPY advanced by 0.21% to 145.107 on Friday morning, boosting buyer appetite for Nikkei-listed stocks.
Investors Ignore Weak Chinese Industrial Profits
China’s industrial profits increased by 0.5% year-to-date. Industrial profits dropped significantly from July’s 3.6%. However, investors brushed aside the numbers as the People’s Bank of China and Politburo rolled out policy measures to bolster the economy.
On Friday, the People’s Bank of China cut the 14-day reverse repo rate from 1.85% to 1.65%, signaling further policy support to China’s banks.
Bloomberg TV Asia Pacific Chief Markets Editor David Ingles commented on the Mainland China equity markets, stating,