Asian markets were subdued yesterday, as the extended Lunar New Year holiday approached and Japan reported lackluster economic growth.
The holiday period meant that trading floors were closed in Shanghai, Seoul and Taipei. Hong Kong and Singapore closed after half-day sessions.
US markets were also closed for Presidents’ Day.
Photo: AP
Limp GDP growth in Japan rattled the post-election high of Japanese Prime Minister Sanae Takaichi following her recent landslide win.
On a quarterly basis, the world’s fourth-biggest economy expanded just 0.1 percent in the final quarter of last year, the Cabinet Office reported.
The figures — which undershot market forecasts of 0.4 percent — add pressure on Takaichi, who made boosting economic growth a key pledge ahead of her landslide victory in the Feb. 8 snap election.
Japan’s economy expanded at an anemic 0.2 percent annual pace last quarter, the data showed, with growth for all of last year at just 1.1 percent.
Tokyo closed 0.2 percent down, while Hong Kong rose 0.5 percent as trading closed early for Lunar New Year. Wellington, Jakarta and Manila posted marginal losses, while Sydney, Mumbai and Bangkok were up. Singapore and Kuala Lumpur were little changed.
Markets showed signs of stabilizing after a tech-led plunge last week, when traders reacted to growing concern about the hundreds of billions spent on artificial intelligence (AI) infrastructure and when, if ever, they might see a return on them.
Investors will keep an eye on artificial intelligence this week as the five-day AI Impact Summit began in New Delhi yesterday, with the likes of OpenAI CEO Sam Altman and Google CEO Sundar Pichai in attendance.
While frenzied demand for generative AI has turbocharged profits and share prices for many technology companies, anxiety is growing over the risks that it poses to society and the environment.
The sense of calm continued from Friday, when government data showed consumer inflation in the US last month cooling slightly more than expected.
Analysts say the figure allows the US central bank to cut interest rates again later this year, but warn that policymakers need to see sustained improvement to do so.
“US inflation data was good. And the initial response in equities reflected that. But the devil was in the details,” Capital.com senior financial market analyst Kyle Rodda said. “Annual headline and core inflation dropped to new lows, with the critical core number falling to the lowest level since March 2021 at 2.4 percent.”
Elsewhere, gold crept above US$5,000 an ounce after Friday’s climb following softer US inflation. Silver was down 0.7 percent.
“Markets have priced in a higher probability of deeper Fed rate cuts this year, driving real yields lower and supporting gold demand,” Standard Chartered PLC said in a note. “We expect gold to remain well-supported.”
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