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Asia-Pacific markets drop as BoJ meet, China LPR in focus

China stocks

China will release its loan prime rates on Wednesday, while inflation data from Japan is due Friday

Asia-Pacific markets dropped Monday at the start of the penultimate week of 2023, after most markets in the region soared last week after the U.S. Fed’s decision to hold rates and its roadmap for rate cuts in 2024 and 2025.

The Bank of Japan will meet for the last time this year. A note from Dutch bank ING said it expects the Bank of Japan to maintain all its major policy settings, “though the overall tone about future policy at the press conference and statement could start to soften.“

A Reuters poll of economists also expects the BOJ to maintain its benchmark interest rate at -0.1 per cent.

Separately, China will release its loan prime rates on Wednesday, while inflation data from Japan is due Friday.

In Australia, the S&P/ASX 200 was 0.26 per cent down, on pace to snap a six-day winning streak.

Japan’s Nikkei 225 declined 1.22 per cent, while the Topix saw a bigger decline of 1.56 per cent.

South Korea’s Kospi struggled to make headway, dropping 0.11 per cent; the small-cap Kosdaq was the exception, gaining 1.35 per cent.

Hong Kong’s Hang Seng index shed 0.85 per cent, while the mainland Chinese CSI 300 lost 0.30 per cent.

On Friday in the U.S., markets closed mixed, and with the Dow Jones Industrial Average 0.2 per cent higher and setting a new intraday record and the Nasdaq Composite up 0.4 per cent. The Nasdaq-100 closed Friday at 16,623.45, topping a record close dating back to November 2021.

In contrast, the S&P500 dipped slightly, but still logged gains for a seventh consecutive week to mark its longest winning streak since 2017.

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