Marketmind: Spotlight shines on Japanese, Australian consumers

© Reuters. FILE PHOTO: People enjoy drinks and food at izakaya pub restaurants at the Ameyoko shopping district, in Tokyo, Japan February 15, 2024. REUTERS/Issei Kato/File Photo

By Jamie McGeever

(Reuters) – A look at the day ahead in Asian markets.

Thursday’s Asia-Pacific economic calendar is one of the busiest of the year so far, with a raft of top-tier indicators from across the region certain to get local markets moving before U.S. inflation figures are out later in the day. 

The global mood is more cautious, certainly relative to the recent Nvidia-fueled excitement – the MSCI Global and Asia ex-Japan indexes on Wednesday posted their steepest declines in two weeks, and the three major U.S. indexes also closed in the red as investors braced for U.S. inflation data on Thursday.

Retail sales data from Japan and Australia, and fourth-quarter GDP figures from India are the highlights that will give investors in Asia a steer on how the monetary policy path for these three key economies is shaping up.

Consumer price data from Japan and Australia this week gave investors plenty food for thought – Japanese inflation in January failed to moderate as much as expected, and Australian inflation failed to accelerate, as per the consensus forecast.

Will retail sales surprise as much as inflation did? Consumer spending in both countries is expected to accelerate in January from the month before, Reuters polls show. 

The Bank of Japan is preparing to exit years of ultra-loose policy and implement positive interest rates for the first time since 2016, while the Reserve Bank of Australia is preparing to cut rates.

The Australian dollar was one of the biggest losers among major currencies and RBA rate cut expectations were trimmed after that inflation surprise. Traders now see 40 basis points of easing this year, with the first cut not coming until September.

India’s economic growth, meanwhile, is expected to have moderated to 6.6% year-on-year in the October to December quarter as robust government spending slowed and growth in the agriculture sector remained muted. 

The range of forecasts in a Reuters poll of 63 economists was from 5.6% to 7.4%. If recent history is any indication, any surprises are likely to be on the upside – official GDP growth releases for the preceding three quarters broadly surpassed economists’ predictions.

After a lull of a few weeks, Chinese markets are once again being led by news headlines on the country’s troubled property sector.

Developer Country Garden said on Wednesday a liquidation petition has been filed against it for non-payment of a $205 million loan, clouding its debt revamp prospects and undermining Beijing’s effort to restore confidence in the property sector.

Hong Kong announced major measures on Wednesday to bolster its flagging real estate market by scrapping all tightening measures for residential properties, and canceling all additional stamp duties on transactions imposed in the past decade. 

Chinese stocks have enjoyed a decent revival in recent weeks, but that may be fading. 

Here are key developments that could provide more direction to markets on Thursday:

– Japan retail sales (January)

– Australia retail sales (January)

– India GDP (Q4)

(By Jamie McGeever; editing by Deepa Babington)