Most Asian stocks remained flat amid concerns over U.S. trade tariffs, with Japanese markets dipping following BOJ Governor Ueda's hints at possible rate hikes due to rising inflation. U.S. stock futures rose after Trump delayed EU tariffs, but tensions remain over potential tariffs on smartphones, impacting tech stocks across Asia. Japan's economy shrank in Q1, and regional markets showed mixed responses to economic data and corporate earnings.
Most Asian stocks were muted as investors exercised caution ahead of key central bank meetings, particularly from the Federal Reserve and the Bank of Japan. Japanese stocks rallied ahead of the BOJ meeting, with speculation that the central bank may end its ultra-dovish monetary policies. Chinese stocks inched higher despite mixed production and retail sales data, while Australian and Indian markets showed caution ahead of central bank meetings.
Hirotake Yano, the billionaire founder of Japanese discount retailer Daiso, has passed away at the age of 80. He was a pioneer of the dollar shop business model, opening his first store in 1972 and growing the company to over 4,000 stores in Japan and almost 1,000 worldwide. Daiso, known for its 100 yen pricing, has had to adapt its approach to pricing and now sells goods at multiples of 100 yen.
Taylor Swift's Eras Tour at the Tokyo Dome is estimated to inject $228 million into the Japanese economy, with $162.7 million going directly to Tokyo. The concert's impact is expected to extend beyond ticket sales, as fans from all over Japan and the Asia-Pacific region engage in sightseeing activities, lodging, and transportation. Despite ticketing challenges, international fans expressed their dedication to Swift, with one fan from the Philippines stating that the singer has had a profound impact on her life.
The Bank of Japan has maintained its ultra-loose monetary policy, keeping interest rates at -0.1% and trimming its core inflation forecast for the next fiscal year. The decision was widely expected, and the central bank's move to retain negative rates makes it the only one in the world with such a policy. The BOJ's outlook for the Japanese economy includes a lowered growth forecast for core consumer prices in fiscal 2024, but a marginal increase for fiscal 2025. Governor Kazuo Ueda is set to explain the decision in a press conference, with market consensus pointing to a potential change in the negative rates regime at the BOJ's April meeting.
A strategist argues that the Bank of Japan (BOJ) needs to transition to a "new normal" as its current ultra low interest rate policy has been "very harmful" for the economy. The strategist suggests that moving to a more normal structure and allowing bond and equity markets to function would benefit financial markets. The BOJ recently kept interest rates unchanged but loosened its yield curve control, signaling a potential shift away from negative interest rates. Moving away from negative rates would have wide-ranging effects on the Japanese economy. The strategist also believes that the yen is undervalued and expects longer-term Japanese government bond yields to rise significantly.
