Asia-Pacific markets trade mixed as investors focus on central bank meetings

SINGAPORE — Asia-Pacific markets traded mixed on Monday, with some indexes giving up gains, as investors turned their focus to a number of monetary policy meetings happening this week.

In Japan, the Nikkei 225 rose 0.71% to 28,640.49 while the Topix index added 0.13% to 1,978.13. South Korea’s Kospi gave up earlier gains and fell 0.28% to 3,001.66. Australia’s benchmark ASX 200 added 0.35% to 7,379.30.

Hong Kong’s Hang Seng index gave up early gains and fell 0.17% to 23,954.58. Reuters reported that Chinese artificial intelligence start-up SenseTime Group will withdraw its $767 million Hong Kong initial public offering after it was placed on a U.S. investment blacklist.

Chinese mainland shares also advanced: The Shanghai composite rose 0.4% to 3,681.08 and the Shenzhen component added 0.67% to 15,212.49.

Major benchmarks in India also gave up gains and traded down in the afternoon — the Nifty 50 declined 0.81% as of 4:44 p.m. HK/SIN time and the S&P Sensex lost 0.9%.

A number of high profile central banks are due to hold their monetary policy meetings this week, including the U.S. Federal Reserve, the Bank of Japan, the Bank of England and the European Central Bank.

“Accelerated Fed tapering seems assured when the [Federal Open Market Committee] meets this week,” ANZ Research analysts wrote in an early morning note.

They said they anticipate the U.S. central bank to reduce its monthly bond purchases by $30 billion a month starting in January compared with $15 billion currently.

“The Fed’s guidance around transitory inflation will be dropped, and the new inflation guidance is likely to reflect a clear determination to act accordingly to bring inflation under control,” the analysts added.

On Friday, data showed inflation in the United States accelerated at its fastest pace since 1982. Investors shrugged off the print and markets reacted positively to the report.

“Markets were evidently braced for even worse news,” said Ray Attrill, head of foreign-exchange strategy at the National Australia Bank, in a morning note.

Attrill said that the test for markets this week, apart from the various central bank meetings, is whether the latest developments around the new Covid strain omicron can “derail risk sentiment.”

In the currency market, the U.S. dollar rose 0.25% against a basket of its peers. The dollar index was at 96.334, compared with its previous close at 96.097.

The dollar’s performance will likely be influenced by the central banks, particularly the Fed. The greenback “can lift this week,” said analysts at the Commonwealth Bank of Australia.

“We expect the FOMC’s policy announcement and updated forecasts will reinforce Chair Powell’s hawkish pivot and can underpin gains in the USD.  We expect the USD to trade in a 94.5‑97.5 range into year‑end,” the analysts said in a Monday note.

The Japanese yen changed hands at 113.66 per dollar, weakening from an earlier level around 113.25, while the Australian dollar fell 0.38% to $0.7144.

Oil prices rose Monday during Asian trading hours. U.S. crude futures traded up 0.57% at $72.08 a barrel while global benchmark Brent was up 0.52% to trade at $75.54.