Investing.com — Most Asian stocks fell on Friday, ending the first full-year trading week of 2025 weak as investors remained wary of a slowing pace of U.S. interest rate cuts and a possible hike by the Bank of Japan. I finished it.
Weak inflation data from China released earlier this week and heightened speculation about President-elect Donald Trump’s plans for tariffs on China also weighed on the market.
Hawkish signals from the Federal Reserve this week reinforced expectations that the pace of monetary easing will slow this year, and regional markets followed global markets.
U.S. stock index futures fell in Asian trading as investors froze ahead of important data to be released later in the day, which is likely to be factored into the interest rate outlook.
Japanese stocks fall on expectations of Bank of Japan interest rate hike
Japanese stocks were in the red for the third straight day as higher-than-expected wage and consumer spending data raised expectations that the Bank of Japan might raise interest rates in January.
It fell by 0.6% and 0.5%. Both indexes fell 1% and 2.2%, respectively, for the week.
The data, released a day after the data showed a stronger-than-expected increase in the coronavirus, showed a stronger result than expected in November.
The strong spending data comes as Japanese earners continue to benefit from significant wage increases realized in early 2024.
Analysts said the strong spending reflects the Bank of Japan’s expectations for a virtuous cycle of higher inflation, which could lead to the central bank raising interest rates as early as January.
The company stuck to this idea and put more pressure on Japanese stocks, especially those with export exposure.
Chinese stocks weighed down by weak statistics and tariff concerns
China’s index and Hong Kong’s index each fell about 0.3%, while Hong Kong’s index was flat.
All three indexes posted weekly declines, with the Hang Seng Index dropping 2.2% after one of its largest constituents, Tencent Holdings (Hong Kong:), was added to the US blacklist this week.
The addition was also made under the Biden administration, but raised concerns about how tough the U.S. rhetoric toward China would become once President Trump took office on Jan. 20.
Sentiment toward China was further undermined by weak inflation data released this week, but the results also spurred some bets on more stimulus from the Chinese government.
Asian markets as a whole turned negative as risk appetite weakened ahead of the US employment report.
Australia’s index fell 0.6% and Singapore’s index fell 1.5%.
In South Korea, the numbers were flat amid continued domestic political turmoil as authorities sought to arrest President Yun Seok-yeol over the failure to enforce military laws.
Indian indexes showed they started trading sideways, with a series of important Indian company results set to be announced in the coming days. However, the index has continued to fall sharply in recent weeks as confidence in the Indian economy declines.
