Most Asia Pacific stocks were up on Wednesday after Fed’s dovish tone towards the monetary policy. Japan’s Nikkei 225 index slightly increased after the release of the monetary policy minutes by the Bank of Japan (BOJ). Australia’s ASX 200 declined while Hong Kong’s Hang Seng index jumped 1.55%. Mainland Chinese stocks, Shanghai Composite and Shenzhen Component also rose.
Japan’s Economic Outlook
The Bank of Japan released its monetary policy minutes on Wednesday. To maintain the stability of financial markets the BOJ, purchased CP and Corporate bonds to finance the Corona pandemic response. It also ensured provision of ample funds especially through purchases of JGBs.
According to the Bank of Japan, the country’s economy has been gradually increasing. Exports and industrial production have increased. This was boosted by global economic recoveries which saw a rise in goods’ demand.
Corporate profits and business sentiment had also improved. Despite weaknesses in some industries, the aggregate supply of goods rose. This was mainly boosted by a pick-up in machinery investment in most companies.
The Nikkei 225 index remained on a standstill after the release of weak Japan Manufacturing PMI. June’s Purchasing Managers’ Index (PMI) slipped from 53.0 in May to 51.5. This was the weakest reading of the headline index in four months.
Output levels declined for the first time since January, the fastest decline rate since November 2020. Growth in new orders reduced at a marginal rate. Despite all that, employment rates have been on the rise for three consecutive months and are growing at the fastest pace since January 2020.
Japan’s Services PMI slightly boosted the Nikkei 225 index. The country’s services’ PMI advanced from May’s 46.5 to 47.2 in June. This signaled a softer but moderate fall in services output. New businesses reduced compared to May.
Nikkei 225 Movers
Hitachi Construction Machinery Co was the best performer in the Nikkei 225 index. The company gained 5.22% in its stock earnings after a recycling company purchased 95 excavators from the company.
CyberAgent gained 3.25% in its stock prices. This was a few weeks after the company recorded strong earnings surpassing its full-year operating profits estimates.
Eisai led the laggards in the index. The pharmaceutical company lost 4.52% in its stock earnings weeks after the United States approved its drug.
Sony dropped by more than 1.79% a few weeks after TSMC announced a joint venture between them and Sony to build a factory in Japan.