MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 0.4%
Asian shares gained on Wednesday after soft U.S. producer prices data stirred hopes that consumer price inflation would be benign, while the New Zealand dollar plunged after the country’s central bank cut rates for the first time since 2020.
European stock futures point to a higher open as figures showed British inflation rose less than expected in July. EUROSTOXX 50 futures extended earlier gains to be up 0.5% and FTSE futures added 0.6%. U.S. equity futures were flat.
Adding to the busy news flow in Asia was an announcement that Japanese Prime Minister Fumio Kishida would step down as ruling party leader in September, ending a three-year term marked by rising prices and marred by political scandals.
The Japanese yen and the Nikkei wavered after the news. The yen was down 0.2% and the Nikkei gained 0.6%, pulling further away from the lows touched after last week’s massive selloff.
The kiwi dollar plummeted 1.1% after the Reserve Bank of New Zealand (RBNZ) cut interest rates by 25 bps to 5.25% and hinted more easing to come. That was a year earlier than its own projections.
The RBNZ faced a tricky decision today – turning points are always difficult. But the Committee decided they had sufficient confidence in the inflation outlook to start easing monetary conditions, according to Sharon Zollner, chief economist at ANZ.
Now the RBNZ has started cutting, a 25bp cut at each meeting is the default, so we have pencilled that in as our own forecast for now, down to a low of 3.5% as before, Zollner added.
MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 0.4%. Most markets gained but China was an exception, with both Hong Kong’s Hang Seng and mainland blue chips 0.5% lower.
