Japan's GDP Expands, China Trims Rates, Asian Markets Close Higher

Arjun Pandit
15 Aug, 2022
Mumbai

Asian markets closed higher after a day of choppy trading and investors digested the latest mixed economic data from China, Japan and the U.S. 

The Nikkei 225 index increased 1.1% to 28,871.78 following the market advance in New York. 

Investors bid up stocks in Tokyo after a U.S. private survey showed consumers are lowering inflation expectations after gasoline prices declined for 58 days on a row. 

The weaker gasoline prices also supported growing expectations that consumer inflation may have peaked, easing pressures on the U.S. Federal Reserve in lifting rates by a larger amount of 75 basis points. 

Japan's economy expanded in the second quarter ending in June but the growth was slower than expected. 

The economy expanded at an annual rate of 2.2%, the Cabinet Office said in a preliminary reading on Monday. 

After adjusting for seasonality factors, the economy expanded at 0.5%. 

The economic contraction in the first quarter was upwardly revised to 0.5% from 1.0% on an annual basis and revised higher to 0.1% contraction from the previous estimate of 0.2% on a monthly basis. 

Daiichi Sankyo soared 14.5% to 4,211.0 yen after the company won an arbitration rule against the biotech firm Seagen. 

Pan Pacific International Holdings rose 11.5% to 2,408.0 yen after the operator of discount store Don Quijote lifted its annual income outlook. 

The company estimated first-half ending in December 2022 sales to increase 4.4% and sales in the full-year ending in June 2023 to increase 3.3%. 

Net income per share in the first-half is estimated at 55.34 yen and for the full-year at 95.42 yen.   

The Shanghai Composite Index closed nearly unchanged at 3,276.09 and the Hang Seng Index to 20.040.86.. 

The People's Bank of China lowered its 7-day short term lending rate and medium term one-year rate by 10 basis points to 2.0% and 2.75% respectively.  

A barrage of economic data from the statistics bureau painted a mixed but weak economic picture. 

 Rates have been lowered for the first time since January after the latest industrial production and retail sales data showed persistent weakness in the economy.    

Industrial production rose at a slower pace of 3.8% in July after rising at 3.9% in June, the National Bureau of Statistics said Monday.    

On a monthly basis, industrial production increased 0.38%.    

Retail sales of consumer goods rose at a slower pace of 2.7% in July after rising at 3.1% in June, the NBS data showed. Retail sales rose 0.27% on a monthly basis.    

However, international trade activities were one of the brighter aspects of the economy.    

International trade shot up 16.6% from a year ago in July after rising 14.3% in June,     

Specifically, exports surged 23.9% to 2,244.6 billion yuan and imports jumped 7.4% to 1,561.9 billion yuan. The trade surplus increased to 682.7 billion yuan.    

The unemployment rate in July declined to 5.4% from a year ago in July from 5.5% in June.    

Consumer prices accelerated at 2.7% rate in July after rising at 2.5% in June.  

Markets in India were closed to celebrate the 75th Independence Day holiday ending a century of exploitation and devastation during the U.K's colonial rule. 

In cautious trading, Australian market indexes closed higher, reacting to mixed corporate news and ahead of the release of minutes of meetings of the Reserve Bank of Australia's August policy meeting. 

The ASX 200 Index rose 0.5% to 7,064.30, while the broader All Ordinaries Index gained 0.5% to end at 7,324.90.

BHP Billiton edged up a fraction and Santos declined 1.1% ahead of the earnings release later in the week.