Asian shares quietly consolidated recent big gains on Monday, as the Lunar New Year holiday led to thin trading, while poor economic data from Japan dampened the market’s boom.
China, South Korea and Taiwan were among the closed markets, leaving currencies and bonds calm but precious metals under renewed pressure.
Japan reported that its economy grew by just 0.2% year-on-year in December, well below forecasts for growth of 1.6% as government spending slowed activity.
The disappointing data underscores the difficult task ahead for Prime Minister Sanae Takaichi and should support her push for more aggressive fiscal stimulus.
Japan’s Nikkei rose 0.2%, after rising 5% last week. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.4%.
South Korea’s predominantly tech market rose 8.2% last week, while Taiwan rose nearly 6% for the week.
“Our fear in Asia is that if the mega-cap tech firms announce a pause in capital investment, it could lead to a sharp correction in memory stocks that have surged this year in markets like Korea,” said Nick Ferres, chief investment officer at Vantage Point.
“While the rotation is likely to favor emerging markets, we are increasingly cautious on memory stocks in Korea and Taiwan following their exceptional performance and re-rating.”
For Europe, EUROSTOXX 50 futures rose 0.1%, while DAX and FTSE futures added 0.2%, SEEbiz reports.
S&P 500 futures rose 0.2%, while Nasdaq futures rose 0.1%.
The week’s headline data won’t be released until Friday when global manufacturing surveys arrive and the US will release fourth-quarter gross domestic product.
Median forecasts are for annual growth of 3.0%, down from 4.4% in the previous quarter, but still solid.
