Asian Market

A weak US labour report and a surge in oil prices toward $119 have revived fears that financial markets may be entering a stagflationary environment of slowing growth alongside persistent inflation.

Deflation risks linger as CPI cooled in January, underscoring weak consumption, but efforts to spur demand and contain price competition are starting to make a dent.

Japan’s Nikkei 225 hit record highs as a decisive election outcome lifted political uncertainty and boosted investor confidence. The rally reflects optimism about pro-growth policy direction and a broader re-pricing of risk across markets, not just technical momentum.

The pair extends its gains on Yen weakness from fiscal worries tied to the elections and a greenback recovery, but dowside risks linger.

The pair drops as markets anticipate FX intervention, after Japanese Prime Minister Takaichi vowed to act against speculative moves, while broader US dollar weakness adds pressure.

HKG33 finds support after consumer prices accelerated in November, but deflation fears persist

China's leaders confirmed recent policy shifts aimed at boosting growth, focusing on higher government spending, long-term bonds, and lower interest rates. A 5% growth target is expected for next year, with more details to be revealed in March.

HKG33 is tepid as Chinese authorities announced new fiscal support, but the lack of details and soft inflation report sustain skepticism

China faces significant economic challenges, with upcoming fiscal measures anticipated to support growth amidst a troubled property market. Despite some positive signs, experts warn that more aggressive interventions are needed to restore confidence and ensure a sustainable recovery.

China’s stock market has surged following decisive government actions, including interest rate cuts and property sector support. However, deeper concerns about weak consumer confidence and deflation remain. Analysts argue that further fiscal measures are needed to sustain long-term economic recovery.

The European Union has approved tariffs of up to 45% on electric vehicles imported from China to counter alleged unfair subsidies and protect local manufacturers. This decision has raised concerns among member states, particularly Germany, about potential retaliation from China and its impact on European exports. Chinese EV makers now face challenges in adjusting to these tariffs, with some considering production shifts to Europe to mitigate the financial burden.