BANGKOK – Global and Asian financial markets kicked off the first full trading week of September with uneven performance on Tuesday, as U.S. markets remained closed for the Labor Day public holiday, leaving investors to parse new regional economic data and anticipate key upcoming U.S. inflation reports.
Japan’s benchmark Nikkei 225 index erased early positive gains to close down 0.3% at 66,170.34, following an upward revision to the country’s second-quarter economic growth data. The Japanese Cabinet Office now estimates the nation’s gross domestic product expanded at an annualized rate of 1.4% between April and June, up from an initial estimate of 1.1% released earlier. The upgrade stems from stronger-than-previously-calculated business investment, though Norihiro Yamaguchi, senior analyst at Oxford Economics, noted that overall capital expenditure still contracted by 0.9% year-on-year.
Yamaguchi warned of ongoing headwinds for Japan’s economy in coming months, pointing out that the temporary boost to consumer spending from government policy measures rolled out in April and May has already started to fade. He added that supply-side inflation is set to accelerate as businesses pass elevated input costs onto consumers, further eroding household purchasing power.
Currency markets saw significant movement for the Japanese yen, which climbed against the U.S. dollar early Tuesday. The greenback fell to 153.47 yen from 154.34 yen in previous trading, extending a rally for the yen that has been fueled by market expectations that both the U.S. and Japanese governments will intervene in currency markets to halt further depreciation of the yen. Last week, the dollar briefly surged to nearly 160 yen, a multi-decade low for the Japanese currency that triggered widespread concern among policymakers.
In contrast to Japan’s lackluster performance, South Korea’s Kospi index led regional gains, climbing 1% to close at 7,060.79, driven by sustained buying momentum across the global semiconductor sector. Top chip manufacturer Samsung Electronics saw its shares rise 2.9%, while rival memory chip producer SK Hynix jumped 5.3% on the day.
Other major Asian indexes also posted mixed results. Hong Kong’s Hang Seng Index slipped 0.4% to 25,312.10, while mainland China’s Shanghai Composite Index edged up 0.1% to 3,938.33. New trade data released by China showed a far stronger-than-expected August performance, with exports jumping 25% year-on-year, lifted by robust global demand for Chinese-made electric vehicles and high-technology goods. Australia’s S&P/ASX 200 declined 0.8% to 8,937.90.
Looking ahead, all market eyes are turning to upcoming key U.S. inflation data, which will be released later this week and will heavily influence the Federal Reserve’s upcoming interest rate decisions. On the last trading day before the Labor Day holiday, U.S. markets closed lower: the S&P 500 fell 0.4%, the Dow Jones Industrial Average dropped 0.5%, and the Nasdaq Composite lost 0.3%.
This Thursday, the U.S. Bureau of Labor Statistics will release the August Producer Price Index (PPI), which measures wholesale-level inflation and provides insight into cost pressures facing businesses before they are passed to end consumers. On Friday, the closely watched August Consumer Price Index (CPI) will be published, tracking price changes across a wide range of consumer goods and services, from groceries and furniture to automotive maintenance, travel and dining out.
In global energy markets, crude oil prices climbed early Tuesday amid ongoing geopolitical tensions tied to the six-month military confrontation between the U.S. and Iran. Brent crude, the global benchmark for oil pricing, gained 71 cents to trade at $97.74 per barrel, while U.S. benchmark West Texas Intermediate crude surged 1.8% to $93.13 per barrel. In other currency trading, the euro held steady at $1.1624 against the dollar.
This report was compiled with contributions from AP Business Writers Chan Ho-him based in Hong Kong and Yuri Kageyama based in Tokyo.