Nov 30, 2023: Japan’s Nikkei 225 and South Korea’s KOSPI were the best performers in Asia in November as the prospect of a less hawkish Federal Reserve boosted risk assets across the region.
But Chinese stocks lagged their regional peers for the month, hampered chiefly by concerns over slowing economic growth and laggard stimulus measures from Beijing. A string of weak economic readings from the country kept traders largely wary of local markets, as did concerns over a meltdown in the country’s property market.
Other Asian bourses were set for strong gains in November, as less hawkish signals from the Federal Reserve, coupled with softer U.S. inflation and labor market data spurred bets that the central bank will not raise interest rates any further. Australia’s ASX 200 was trading 3.9% higher for the month, while India’s NSEI was set to add 5.3%.
Nikkei near 33-year highs on dovish BOJ bets, strong earnings
The Nikkei briefly hit 33-year highs in November, and was trading up 7.9% for the month.
Foreign investors had piled steadily into Japanese stocks this year, with the trend picking up in November after the Bank of Japan struck a dovish tone in its policy meeting at the beginning of the month.
The BOJ made few changes to its ultra-dovish policy, and also signaled that it was in no hurry to begin tightening policy, especially as recent data also suggested that Japanese economic growth was under pressure. The country’s gross domestic product shrank much more than expected in the third quarter.
A dovish BOJ has been a key point of support for Japanese stocks this year, given that it is among the few major central banks that still plans to maintain easy policy and asset buying measures.
Strong third-quarter earnings, particularly from index-heavy automobile and bank stocks also boosted sentiment towards Japanese markets.
Source Courtesy: Investing.com