Asia Market News: Nikkei Dives on Bank of Japan Pivot Bets; Hang Seng Bucks Trend

Asian Equity Markets Had a Mixed Monday Morning Session

It was a mixed Monday morning session for the Asian equity markets. The Nikkei and ASX 200 were down 2.34% and 1.48%, respectively. However, the Hang Seng Index bucked the broader market trend, gaining 1.12%.

Economic indicators from the weekend drove buyer demand for Hang Seng-listed stocks. Consumer price inflation numbers from China turned positive in February, raising hope of an end to deflationary pressures. Consumer prices increased by 0.7% year-on-year in February after falling by 0.8% in January year-on-year.

However, producer price figures for February suggested the Lunar New Year likely fueled the demand-driven rebound in consumer prices. In February, producer prices declined by 2.7% year-on-year after falling 2.5% in January.

Tech stocks benefited from the CPI numbers, with the Hang Seng TECH Index rising 2.08% in the morning session.

US Equity Market Losses and GDP Numbers from Japan Impact the Nikkei

The US equity market reaction to the US Jobs Report set the tone for the Monday session. Before the opening bell, Nikkei futures had declined by more than 700 points. However, GDP numbers from Japan contributed to the morning session losses.

According to finalized figures, the Japanese economy expanded by 0.1% in Q4. The economy had contracted by 0.1%, according to the preliminary report. An upward revision to capital expenditure contributed, while a downward revision to private consumption was noteworthy. The GDP numbers raised bets on a March Bank of Japan pivot from negative rates, impacting the USD/JPY and the Nikkei.

The USD/JPY fell to a morning session low of 146.534 before steadying. For the BoJ, the downward revision to private consumption redirected the focus to wage negotiations on March 13. Agreements to hike wages could cement a March BoJ exit from negative rates.

Risk Off Sentiment Impacts the AUD/USD and the ASX 200

Market risk sentiment pressured the AUD/USD, falling 0.26% to $0.66092 on Monday. The ASX 200 was down 1.48%, tracking US equity market losses from Friday.

The losses through the morning session were broad-based. Gold (XAU/USD) stocks Northern Star Resources Ltd. (NST) and Evolution Mining Ltd. slid by 2.63% and 3.60%. Mining stocks also saw heavy losses. Fortescue Metals Group Ltd. (FMG) declined by 2.93%. BHP Group Ltd (BHP) and Rio Tinto Ltd. (RIO) were down 2.57% and 3.05%, respectively.