Asian Markets Rebound, Japan Inflation at 7-Year High

Arjun Pandit
24 Jun, 2022
New York City

Asian markets rebounded on the final day of the week supported by a sustained advance in the U.S. and weaker commodities prices. 

The market sentiment turned positive and investors looked ahead to corporate results for the current quarter. 

The Nikkei index in Japan closed higher led by gains in tech stocks. 

The battered yen found support at 135.17 against a dollar after inflation gained for the second month in a row and stayed near a 7-year high. 

Consumer price inflation in May increased to 2.5% from a year ago and on a seasonally adjusted monthly basis slowed to 0.2% from April after rising 0.4% in the month.

The inflation data were released by the internal affairs ministry today. 

The Nikkei index in Tokyo added 1.2% to 26,491.97 and for the week increased 1.95%. 

Tokyo Electron gained 4%, Advantest increased 3.5%, and Screen Holdings increased 2.6%. 

Stocks in Hong Kong and Shanghai gained on the hopes that the technology crackdown is easing and the economic activities are on the rebound after two months of severe lockdowns across the nation. 

Indexes in Hong Kong gained 1.3% to 21,273.34 and in Shanghai rose 1.6% to 3,320.15. 

For the week, the Hang Seng advanced 3.7% and the SSE gained 1.0%. 

Stocks in Mumbai advanced for the second day in a row following advances across Asia. 

Investors looked beyond rate hikes and elevated commodities prices and focused on earnings growth in the current quarter. 

Traders also took note of the latest comments from the RBI Governor Das. 

Das commented that headline inflation is likely to stay above the central bank's target rate of 2% until December and moderate after. 

"Inflation expectations influence not only households but also businesses and drive up pricing of food, manufactured goods and services. 

If they expect inflation to be high, even companies will defer their investment plans," Das commented. 

The Sensex index gained 462.25 or 0.9% to 52,727.98 and the Nifty 50 index increased 0.9% to 15,699.65.

For the week, the Sensex and the Nifty gained 2.8% and in the year so far declined 10.9%. 

The Kospi index in Seoul rebounded 2.3% to 2,366.60 after hitting a 19-month low on recession worries in the previous session. 

Naver Corp surged 5.8%, Samsung Electronics increased 1.7%, and SK Hynix closed up 1.6%.