Asia markets edge up ahead of trade talks, central bank decisions

FAN Editor

Stocks in Asia Pacific edged up in Tuesday morning trade as investors await developments from U.S.-China trade talks this week in Shanghai as well as monetary policy decisions from major central banks.

The Nikkei 225 rose 0.55% in early trade, with shares of index heavyweight Fanuc jumping 3.45%. The Topix index also added 0.46%.

Investors will be watching for the Bank of Japan’s announcement of its decision on interest rates at 11:00 a.m. HK/SIN on Tuesday, after the European Central Bank last week signaled a potential rate cut and more monetary easing ahead.

“The BoJ is widely expected to make no monetary policy changes and reiterate its ‘powerful monetary easing’ stance,” Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia, wrote in a morning note.

The risk that the Japanese central bank introduces more aggressive easing measures, however, “cannot be ruled out,” Grace said. This could result in a “headwind” for the Japanese yen. The currency last traded at 108.87 against the dollar after weakening from levels below 108.5 yesterday.

Meanwhile, government data released earlier on Tuesday showed Japan’s factory output falling more than expected in June.

In South Korea, the Kospi rose 0.45% following a slump on Monday, with shares of index heavyweight Samsung Electronics jumping more than 1%. Over in Australia, the S&P/ASX 200 gained 0.65%.

Overall, the MSCI Asia ex-Japan index added 0.22%.

Asia-Pacific Market Indexes Chart

Overnight stateside, the Dow Jones Industrial Average rose 28.90 points to close at 27,221.35. while the Nasdaq Composite fell 0.44% to end its trading day at 8,293.3. The S&P 500 slipped 0.16% to close at 3,020.97.

Meanwhile, U.S.-China trade negotiations are set to happen in Shanghai this week as the two economic powerhouses seek to reach a deal to end a protracted trade dispute.

Investors also await the U.S. Federal Reserve’s decision on interest rates, set to be announced on Wednesday stateside. The central bank is widely expected to cut its benchmark lending rate for the first time since 2008 by 25 basis points.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.083 after rising from levels below 98.0 yesterday.

The Australian dollar changed hands at $0.6898 following declines from levels above $0.702 seen last week.

Here’s a look at what’s coming up ahead today:

  • Japan interest rate decision at 11:00 a.m. HK/SIN
  • China: First half financial statements for Huawei
  • South Korea: Samsung SDI, LG Electronics earnings
  • Hong Kong: Hang Lung Group, Hang Lung Properties, IMAX China earnings
  • Japan: Sony, ANA Holdings, Mitsubishi Electric, SMFG, Nintendo earnings

— CNBC’s Thomas Franck contributed to this report.

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