© Reuters.
Investing.com – Most Asian stocks rose on Monday as lower U.S. inflation boosted hopes the Federal Reserve will remain less hawkish, while data showing improving sentiment towards the Japanese economy returned the Nikkei to 33-year highs.
Data on Friday showed that the Federal Reserve fell more than expected in May, prompting a rally in most risk-driven assets that spilled over into Asian trade this week.
But it remains to be seen if the rally will maintain its momentum, ahead of a series of economic readings and central bank signals this week. Monday’s economic readings also painted a mixed picture for Asia’s largest economy.
Nikkei rises as business sentiment improves, but factory activity tapers off
The Japanese index jumped 1.4% and the broader index rose 1.3%, with both indexes trading near 33-year highs.
The A showed that business sentiment in the country improved during the second quarter, indicating that the economy is recovering as more companies pledged to increase capital spending.
The reading added to optimism about Japan’s economic prospects this year, which, along with the Bank of Japan, has led to sharp gains in Japanese stocks over the past two months.
But a separate survey also confirmed the contraction in June, indicating that the country’s biggest economic drivers remain under pressure.
Chinese stocks rise after mixed factory data
China and indices rose about 1.2% each, showing that China’s manufacturing sector grew more than expected in June. The Hong Kong index added 1.9% on the strength of locally listed Chinese stocks.
But the reading slowed from the previous month, indicating that some resilience points in the Chinese economy may be running out of steam.
Monday’s reading also came after last week showed that China’s factory sector contracted for the third consecutive month in June.
The Fed and the central bank remain in focus
The broader Asian markets advanced on Monday, with a series of regional and US economic signals scheduled for this week.
Australia added 0.5%, lagging behind regional peers ahead of Tuesday, which analysts expect will lead to a 25 basis point interest rate hike. Monday’s data showed that contraction also narrowed in June.
South Korea rose 1.4%, while the index rose 0.9%.
More signals about US monetary policy remained in focus during the week, ahead of Wednesday. For the month of June it is also scheduled on Friday.