Asian shares rise on rate cuts, yen strength weighs By Investing.com

Investing.com– Asian stocks were a mixed bag on Monday, taking some support from expectations of a U.S. interest rate cut, although Japanese markets retreated amid pressure from the yen and bets on a Bank of Japan rate hike .

Regional markets took a positive lead from Wall Street, where they neared record highs on Friday after comments from Federal Reserve Chairman Jerome Powell cemented expectations for a September tapering.

U.S. stock index futures were steady in Asian trade, with the focus on key inflation data due this week as well as earnings from NVIDIA Corporation (NASDAQ: ) for more clues about the artificial intelligence boom .

Japan’s Nikkei slips as yen gains sharply

Japanese stocks lagged a rise in the yen, falling about 1 percent each.

The yen pair – which measures the amount of yen needed to buy one dollar – fell 0.4% and was close to early August lows amid growing belief that the Bank of Japan will raise interest rates further in this year.

Soviet comments by BOJ Governor Kauzo Ueda furthered this notion.

The yen’s strength pressured export-oriented Japanese stocks, while the prospect of higher rates also presented headwinds for the technology and export sectors, which fueled a rally in Japanese stocks earlier this year.

A stronger yen further undermines currency trading, which has served as a vehicle for capital flows to high-yield Asian markets.

due this week, is expected to provide more clues on the path of Japanese interest rates.

Rate cut hopes provide some strength, China lags behind

With the exception of Japan, most other Asian markets rose, tracking gains on Wall Street on expectations of lower US interest rates.

Australia added 0.6 percent and returned to record highs, while India index futures pointed to a slightly positive open.

South Korea was flat, pressured by losses in major chipmaker stocks ahead of Nvidia’s results.

Hong Kong’s index rose 0.8 percent, recovering a measure of steep losses from the previous session and also paring losses in mainland Chinese markets.

Indexes and China fell 0.4 percent and 0.3 percent, respectively, weighed down by lingering concerns about a slowing economic recovery.

Markets were also somewhat spooked by the People’s Bank of China, which withdrew about 101 billion yuan ($14.2 billion) of liquidity from the open market.

While the withdrawal appeared to be aimed at strengthening the yuan, it also raised concerns about the support Beijing is mobilizing for the Chinese economy.

A slowdown in China was a key point of contention for sentiment towards Asia and also left Chinese markets largely behind their peers.