Morning Bid: Asian economic spotlight shines on big powers China and Japan

A man wearing a protective mask amid the coronavirus disease (COVID-19) epidemic walks past an electronic board displaying stock market data outside a securities firm in Tokyo on February 25, 2022. REUTERS/Kim Kyung-Hoon/File Photo

Aug 15 (Reuters) – Jamie McGeever’s Outlook on Asian Markets

Economic data from Asia’s two largest economies kicks off the global trading day on Monday. Here’s his July series of indicators from misfired China and Japan’s second-quarter GDP report.

July industrial output, retail sales, house prices and urban investment measures give us the first insight into how China’s coronavirus-hit economy got off to a good start in the third quarter. Economists generally call for a recovery, albeit modest.

China’s stock market fell for a fifth straight week on Friday, ending the week up 0.8% (.CSI300). This is supported by a comfortable factor on Wall Street and easing tensions between China and the US over Taiwan.

But on Friday, five US-listed Chinese state-owned companies under audit by US securities regulators announced they would voluntarily delist from the New York Stock Exchange.

Meanwhile, Japan’s economy is expected to rebound strongly in the second quarter after contracting in the first quarter, with economists forecasting 0.6% quarterly growth, or 2.5% annualized.

The Japanese yen gained about 1% against the dollar last week. Can the $1/$130 barrier be convincingly breached this week?

The tone across Asia on Monday will also be set by rising expectations that US inflation has peaked. This could further accelerate the rally in risky assets, steepen the US yield curve and weigh on the dollar.

Later on Monday, the US Treasury will release ‘TIC’ data for June. It measures the inflows and outflows of US sovereign debt. Chinese demand will be watched closely in light of recent political tensions.

Key developments that should provide more direction to the market on Monday:

Japan Second Quarter GDP Forecast

China’s industrial output, retail sales, house prices and urban investment data (July)

New York Fed Manufacturing Index (Aug)

Federal Reserve’s Christopher Waller Talks Banking and Finance

Reporting by Jamie McGeever of Orlando, FL. Edited by Matthew Lewis and Lisa Shumaker

Our standards: Thomson Reuters Trust Principles.