Asia Stock Indices Rise After Chinese PMI Disappoints, Japan CPI Drops

Lackluster data boost expectations of monetary stimuli.
By Laura Board ,

A global wave of excitement about potential central bank easing carried Asian stocks higher on Friday after the release of lackluster Japanese data and a disappointing gauge of Chinese manufacturing.

In Tokyo the Japanese economy sunk further into deflation in May, with consumer prices falling 0.4% on the year, slightly better than the 0.5% consensus decline analysts had penciled in but an acceleration from April's 0.3% deflation rate. The Bank of Japan's closely watched Tankan indices of business sentiment showed large manufacturers' view of the outlook was unchanged from March, but other companies' sentiment fell to the lowest point since March 2015.

In China the Caixin purchasing managers' index for the manufacturing sector fell deeper into contraction territory, slipping more than expected to 48.6 in June from 49.2 in May in the third consecutive monthly decline. Readings under 50 signify contraction. Chinese government purchasing managers' indices also released on Friday held above 50, however.

In Tokyo the Nikkei 225 was recently up 0.68% at 15,682.48. In Hong Kong the Hang Seng climbed 1.75% to 20,794.37. Casino operator Galaxy Entertainment was up 2.7% after data showed the pace of revenue declines in Macau casinos slowed in June from May.

On mainland China the CSI 300 was up 0.05% at 3,155.43.

S&P 500 mini futures were down 0.20% and FTSE 100 futures were up 0.92%.

The yield on the 10-year Japanese bond fell to a record low minus 0.245% and was recently down 3 basis points at 0.26%.

The dollar had recently slipped 0.47% against the yen to ¥102.7100 while rising against the pound. One pound recently bought $1.3281, down 0.23%. Bank of England Governor Mark Carney on Thursday indicated the central bank was considering lowering rates over the summer to help counter the impact of Brexit. His comments pushed the FTSE 100 up 2.27%.

Brent crude was down 1.94% at $49.68 and gold was up 0.82% at $1,332.72.

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