On Tuesday morning (17 February, 9:40 AM, GMT+7, Bangkok time), the Asia Pacific markets traded with a thin volume amid closures among some markets, including mainland China, Hong Kong, Singapore, Taiwan, and South Korea, for the Lunar New Year holiday. Additionally, the U.S. stock markets were also closed for the President’s Day.
Japan’s NIKKEI lost 0.83% to 56,335.30, and Australia’s ASX 200 increased by 0.43% to 8,975.20.
The focus in Asia centered on Japan, where recent economic indicators signaled persistent weakness. Data released on Monday showed Japan’s economy expanded by only 0.2% at an annualized rate in the fourth quarter, a result that undershot economists’ 1.6% growth estimate. Reduced government spending was cited as a key factor restraining economic activity.
These figures point to ongoing headwinds for Prime Minister Sanae Takaichi’s administration and bolster expectations that the government may step up fiscal stimulus efforts to reinvigorate growth. Attention now turns to the Bank of Japan’s upcoming policy meeting in March, with current market pricing reflecting minimal expectations for an imminent rate hike. Most economists surveyed anticipate that the central bank will delay any tightening actions until July.
Beyond Asia, investors remain attuned to the U.S. interest rate outlook. Markets responded to last week’s softer-than-anticipated inflation data by increasing bets on a potential Federal Reserve rate reduction in July, with a significant probability of an earlier move in June. Moreover, there is ongoing market sensitivity to developments in artificial intelligence, as changes in sentiment related to the sector have prompted what some analysts refer to as the “AI scare trade,” impacting areas beyond just technology stocks.
As for commodities, oil prices settled higher on Monday as investors are closely watching the scheduled meeting between Washington and Tehran, which will mark the second round of talks concerning Iran’s nuclear program, set to begin Tuesday in Geneva. Developments in these discussions could influence broader geopolitical tensions and may affect future oil supply levels.
Brent crude ended the session up 90 cents, closing at $68.65 per barrel, an increase of 1.33%. U.S. West Texas Intermediate crude also advanced, rising 86 cents to trade at $63.75 per barrel by 2:14 PM EST. West Texas Intermediate did not record an official settlement on Monday due to the U.S. Presidents’ Day holiday.
This morning, Brent crude futures dipped 18 cents, or 0.26%, to $68.47 per barrel, and the WTI jumped 77 cents, or 1.22%, to $63.66 per barrel.
Meanwhile, gold futures slumped by 1.22% to $4,984.90 per Troy ounce.
