Asian Stocks Up, Investors Await Big Week of Central Bank Meetings

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Investing.com – Asia Pacific stocks were up on Monday morning, with investors digesting Japanese data and looking ahead to a week of central bank meetings that could indicate the end of U.S. policy stimulus.

Japan’s Nikkei 225 rose 0.98% by 9:01 PM ET (2:01 AM GMT). Data released earlier in the day showed that the Tankan large manufacturers’ index was 18 for the fourth quarter of 2021, and the Tankan large non-manufacturers index was 9.

South Korea’s KOSPI rose 0.80% and in Australia, the ASX 200 gained 0.54%.

Hong Kong’s Hang Seng Index jumped 1.61%.

China’s Shanghai Composite rose 1.09% and the Shenzhen Component gained 0.51%, with industrial production and retail sales data due on Wednesday.

Investors are also keeping an eye on China’s outlook after top officials said their key goals for 2022 include counteracting growth pressures and stabilizing the economy. This raised expectations of fiscal stimulus in early 2022.

In the U.S., S&P 500 futures closed at a record high Friday following inflation data for November that mostly followed expectations. The consumer price index (CPI) grew 6.8% year on year and 0.8% month on month, while the core CPI grew 4.9% year on year and 0.5% month on month.

Meanwhile, the benchmark U.S. 10-year Treasury yield was below 1.5% and the yield curve is the flattest at the beginning of a tightening cycle in a generation.

Investors now await the Federal Reserve’s policy decision, due on Wednesday. The Fed is among the 20 central banks due to meet throughout the week, with the group also including the European Central Bank, the Bank of England and the Bank of Japan.

However, the outlook still remains uncertain as countries impose restrictive measures to curb the spread of the omicron COVID-19 variant and British Prime Minister Boris Johnson warned that the U.K. faces a “tidal wave” of omicron infections.

“Global equities had a solid run last week and we’ll see if the goodwill lasts into what is a behemoth when it comes to event risk,” Pepperstone Financial Pty Ltd. head of research Chris Weston said in a note. However, omicron and the Fed should dictate sentiment, the note added.

Meanwhile, geopolitical tensions are on the rise after the Group of Seven warned Russia on Sunday to de-escalate its activities around Ukraine or face “massive consequences.”