In This Article:
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Nikkei slides, yen at 7-mth low after BOJ meeting
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China expected to cut rates after growth disappoints
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U.S. closed for holiday, awaits Powell's testimonies
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BOE set to hike rates by 25bps Thursday, oil slumps
By Stella Qiu
SYDNEY, June 19 (Reuters) - Asian shares started cautiously on Monday after their best weekly run in five months, as investors looked ahead to China's rate decision and U.S. Federal Reserve Chair Jerome Powell's testimonies for clues on the path ahead.
Both S&P 500 futures and Nasdaq futures were mostly flat after Wall Street's bullish run met resistance on Friday. Cash U.S. Treasuries were untraded due to the Juneteenth holiday, while futures were largely steady.
In Asia, Japan's Nikkei slipped 0.4%, having clinched a three-decade top on Friday, buoyed by the Bank of Japan's (BOJ) leaving its ultra-easy policy setting unchanged, which sent the yen to a 7-month low against the U.S. dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.6%, after hitting a four-month high on Friday and finishing up 3% for the week, the best since January.
China's blue chips slipped 0.5% while Hong Kong's Hang Seng index eased 0.6%.
In China, hopes for more forceful stimulus are growing after the cabinet met on Friday to discuss measures to spur economic growth, but concerns remain whether they would be enough to revive a faltering economy.
The People's Bank of China is widely expected to cut its benchmark loan prime interest rates on Tuesday, following a similar reduction in medium-term policy loans last week.
Morgan Stanley expects an imminent stimulus package, including the loosening of property buying restrictions in top tier cities, more infrastructure support and targeted consumption subsidies.
"Given that 2Q GDP growth is tracking at 0%, a strong sequential growth re-acceleration will be needed for full-year GDP growth to reach the government target of "around 5%"," said chief China economist Robin Xing.
Several major banks last week cut their growth forecasts for China after the recent disappointing data.
U.S. Secretary of State Antony Blinken will wrap up his rare visit to China on Monday, with investors waiting to see if he would meet China's President Xi Jinping, which would likely be read as a positive sign in the otherwise frothy relations between the world's two biggest economies.
POWELL TAKES STAGE
After a week in which the stock market cheered the Fed's decision to skip a rate hike in June, investors are also looking to a number of Fed speakers this week, with Powell set to deliver congressional testimonies on Wednesday and Thursday.