Asia-Pacific markets experienced declines as investors evaluated Japan’s household spending and pay data. Real household spending in Japan fell by 0.4% year-on-year, which was a smaller drop than the 0.6% decline expected by economists. This was also an improvement compared to the 1.3% fall observed in the previous month.
The average real income per household in Japan stood at 514,409 yen ($3,252.98), showing a 0.7% increase from the previous year.
China’s Central Bank Actions and Bond Market Pressure
Meanwhile, the People’s Bank of China (PBOC) temporarily halted its treasury bond purchases due to short supply in the bond market. The PBOC indicated it would resume purchases based on market conditions.
The Hong Kong Hang Seng Index and mainland China’s CSI 300 both experienced declines, with the latter closing at its lowest level in months.
Market Performance Across Asia
- Japan’s Nikkei 225 fell, marking its third consecutive day of losses.
- The Topix index also dropped, reflecting a broader market downturn.
- South Korea’s Kospi saw a decrease, ending a streak of gains.
- Australia’s S&P/ASX 200 slipped, following early session gains.
Impact of Japan’s Household Spending Decline
Japan’s weak household spending figures pose challenges for the Bank of Japan’s goal to raise interest rates. It could also impede efforts to achieve a virtuous cycle of rising wages and prices.
Sunac China Shares Plunge Amid Winding-Up Order
Shares of Sunac China, a major Chinese property developer, plummeted after the company received a winding-up petition from China Cinda Asset Management. The petition has added to the uncertainty in the Chinese property market.
China’s Central Bank Suspension of Bond Buying
The PBOC suspended its purchases of government bonds following a drop in bond yields. The yields on the 10-year bond fell due to bets on further policy easing and increasing demand for safe-haven assets. The PBOC stated that it would resume bond purchases once market conditions improve.
What Investors Should Know
- Asian markets mostly saw declines, with China’s CSI 300 leading the losses.
- Japan’s real household spending showed a small decrease, but the figures were better than expected.
- Sunac China faced a significant decline after receiving a winding-up petition, reflecting continued volatility in the Chinese property sector.
