Stocks in Asia struggled for momentum as a rally in China took a breather and a round of robust wage-hike deals in Tokyo spurred bets that the Bank of Japan’s interest-rate hike is imminent.
The report on Toyota “strengthened speculation of a BOJ policy revision, leading to a strengthening of the yen and an overall decline in stocks,” said Masahiro Yamaguchi, a senior market analyst at SMBC Trust & Banking Ltd. Still, as Toyota has the biggest impact among all the spring wage negotiations, “there will unlikely be further news that will drag the market lower,” he added.
Traders held on to Federal Reserve rate cuts for this year even after US inflation came in higher than expected. The relative sense of calm in the face of a strong print was unusual, marking a break from how stocks have traded on CPI days since the Fed started lifting rates.