Asia-Pacific Stocks Mostly Higher; Japan Retail Sales Higher than Forecast, Aussie CPI Misses Estimate

The major Asia-Pacific stock indexes settled mixed but mostly higher on Wednesday as investors prepared for another day of major earnings reports from the United States and the U.S. Federal Reserve’s monetary policy statement and interest rate decisions. Economic data from Japan and Australia may have also influenced the price action.

Cash Market Update

In Japan, the Nikkei 225 Index settled at 29053.97, up 62.08 or +0.21%. South Korea’s KOSPI Index finished at 3181.47, down 33.95 or -1.06% and Hong Kong’s Hang Seng Index closed at 29071.34, up 129.80 or +0.45%.

In China, the benchmark Shanghai Index settled at 3457.07, up 14.46 or +0.42% and Australia’s S&P/ASX 200 Index finished at 7064.70, up 30.90 or +0.44%.

Investors Show Limited Reaction to US News

In the U.S. after the closing bell on Tuesday, Google-parent Alphabet reported better-than-expected earnings, sending shares up more than 4%. Microsoft shares dipped about 3% even after the company topped analyst estimates. Starbucks raised its full-year outlook.

The Fed is expected to leave policy unchanged when it releases its monetary policy statement at 18:00 GMT. After the announcement, Fed Chair Jerome Powell is expected to reaffirm his commitment to keeping monetary policy accommodative over a prolonged period of time, though signs of rising inflation expectations has raised some speculation that policy could be tightened sooner than thought.

Japan Shares Move Higher; Retail Sales Beat Estimates

Japanese shares rose on Wednesday, led by technology stocks, although gains were capped by concerns about corporate outlook, while investors awaited a decision by the U.S. Federal Reserve and President Joe Biden’s address to Congress.

Japanese retail sales rose at the fastest pace in five months in March as consumer demand recovered from the huge hit it took from the coronavirus pandemic last year.

The world’s third-largest economy has emerged from last year’s slump on an export recovery, though a glacial vaccine rollout and a resurgence in infections are threatening household’s spending appetite.

Retail sales jumped 5.2% in March from a year earlier, government data showed on Wednesday, a larger gain than the median market forecast for a 4.7% rise. That marked the fastest rise since a 6.4% advance in October and the first positive growth in four months.

Energy Stocks Push Australia Shares Higher; CPI Falls Short of Estimates

Australian shares edged higher on Wednesday as energy stocks rose tracking an uptick in oil prices, though losses in gold and technology capped gains.

Among sectors, energy stocks rose 0.7%, tracking gains in oil prices. Technology stocks fell 0.6% and Gold stocks dropped 3.7%.

In a potentially bullish development, surprisingly soft inflation data argued for super loose policy for years to come from the Reserve Bank of Australia (RBA).

Australian consumer prices rose just 0.6% in the first quarter, when analysts were looking for a 0.9% increase. Even more startling was a slowdown in a key trimmed mean measure of inflation to a record low of 1.1%, well below the RBA’s target band of 2-3%.

For a look at all of today’s economic events, check out our economic calendar.