Bourses in Tokyo, Singapore, Manila and Jakarta gained but Hong Kong, Shanghai, Sydney, Seoul, Taipei and Wellington all declined
Asian markets were mixed on Monday, with optimism over an expected US interest rate cut offset by concerns over the Chinese economy following the release of more disappointing data.
Figures on Friday showed the US personal consumption expenditures index declined in line with forecasts in July, setting the bank up to ease monetary policy this month.
Focus is now on the release of the closely watched non-farm payrolls report, which will provide the latest snapshot of the country’s economy.
While a cut has been priced in, the data could determine how big it will be, with analysts saying another big miss to the downside could prompt officials to cut rates by 50 bps, instead of the expected 25.
A well-below-forecast reading last month fanned fears of a recession and triggered a rout across equities, though figures since then have soothed those concerns.
The spending data continues the run of indicators suggesting that fears the rise in the unemployment rate signalled an imminent turn down in activity are misplaced, said Taylor Nugent at National Australia Bank.
But inflation data remains permissive should the Federal Reserve need to respond more assertively on the labour market, Nugent said.
That leaves the focus squarely on payrolls on Friday as the key indicator ahead of the September 18 rate decision, Nugent added.
He said markets had priced in 100 bps of reductions by the end of the year.
Bourses in Tokyo, Singapore, Manila and Jakarta gained but Hong Kong, Shanghai, Sydney, Seoul, Taipei and Wellington all declined.
Investor sentiment was jolted by concerns over China’s economy after a report showed activity in the country’s manufacturing sector declined for a fourth successive month in August and more than expected.
Observers warned the government’s 5% GDP growth target could be missed this year.
The world’s second-largest economy is sputtering, with factory activity lagging, deflationary pressures mounting, said independent analyst Stephen Innes.
The services sector tried to pick up the slack, but growth there is almost invisible, signalling an economy barely managing a pulse, he added.
