NZD Outperforms on Rate Hike Bets – Asia Market Wrap

Amid public holidays in many markets around the region, including the mainland, Chinese shares in Hong Kong fell for a third straight day, while Japanese stocks marginally increased.

The MSCI Asia Pacific Index is on track for its third straight weekly gain amid a flurry of stimulus announcements from China as it attempted to stem an equity market slump. Both gauges are higher for the week thanks to a big gain on Tuesday amid optimism about state support. Japan’s Nikkei 225 index rose 0.3%, paring earlier gains of as much as 1.2%, while the Hang Seng China Enterprises Index dropped 1%.

Markets closed early Friday in Hong Kong and Singapore, and are closed in mainland China. Investors are now eagerly monitoring the yearly revisions to monthly US inflation statistics, as last year’s adjustments cast doubt on the Federal Reserve’s effectiveness in taming consumer prices.

An index of the dollar was steady, while Australian equities were little changed and Japanese stocks increased, with the weaker yen providing some support. The currency steadied after falling 0.8% against the US dollar on Thursday, following remarks from a deputy governor of the Bank of Japan suggesting the central bank will be in no rush to shift its easy policy settings.

The New Zealand currency outperformed its Group-of-10 peers as traders considered the possibility of another interest rate hike by the central bank.

ANZ now sees RBNZ raising Cash Rate in February and April.

ANZ now sees RBNZ raising Cash Rate to 6% by April.