Asian stock markets may face challenges due to the strengthening of the US dollar following the dovish stance taken by the G7 central banks, combined with robust US economic data exerting pressure on risk-sensitive assets. On Wall Street, which significantly influences Asian equity risk, both the S&P 500 and the NASDAQ Composite concluded the trading session significantly below their highest points amid Apple weakness after the DoJ filed a landmark antitrust lawsuit against it, that could weigh on the tech sector in Asia.
In terms of economic indicators, the focus will be on Japan’s national core Consumer Price Index (CPI) for any signs that the Bank of Japan might adopt a more aggressive monetary policy in upcoming meetings. Should the data surpass expectations, it could place the Nikkei index and the Japanese banking sector under strain, as market participants may foresee a quicker pace of interest rate increases by the Bank of Japan. This speculation is particularly relevant amid rumours of a potential rate hike occurring between June and October. Moreover, the ongoing analysis of the US dollar’s performance against the Japanese yen, especially regarding key resistance levels, will continue to be a central concern for investors as the week concludes. Additionally, investors will pay attention to any statements from Fed members now that the blackout period has ended, as the first quarter’s final trading week approaches.
