Mainland Chinese blue chips rallied 1.63%, leading regional markets up after a private survey showed the country’s manufacturing activity expanded at the fastest pace in 13 months in March
Chinese shares led a rally around most of Asia on Monday amid a broadly optimistic global economic backdrop, but Japanese shares dropped with the yen pinned near levels that have traders on guard for a currency intervention.
U.S. stock futures also pointed firmly higher after a market holiday on Friday, when the Fed released figures showing their preferred inflation measure suggested price pressures are further easing, strengthening bets for a June interest rate cut.
Crude oil remained strong amid a tighter supply-demand picture, with China’s economy improving and expectations of OPEC+ output cuts.
Mainland Chinese blue chips rallied 1.63% at 0230 GMT, leading regional markets up after a private survey showed the country’s manufacturing activity expanded at the fastest pace in 13 months in March, reinforcing official data on the weekend that showed the first expansion in six months in March.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.06%.
However, Japan’s Nikkei dropped 1.5% at one time, weighed down by concerns about yen-buying intervention that would hurt exporter profit outlooks and returns for foreign investors.
There was also selling on the first day of the nation’s new fiscal year, with the benchmark index still near the record high hit just more than a week ago, according to analysts.
Many markets are closed on Monday for Easter holidays, including Australia and Hong Kong in Asia, and the UK and Germany.
“Tamed” U.S. inflation may offer some validation for the Federal Reserve to start its rate-cutting process sooner rather than later, according to Yeap Jun Rong, a market analyst at IG.
With Wall Street eyeing another run for a new record high, that may keep the wider risk-on sentiments going, he added.
In the meantime, the positive China PMIs may pave the way for bearish sentiments to unwind in the near term, he said.
