Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Asian Stocks Down, “Goldilocks” Central Bank Scenario Continues

Stock MarketsJul 07, 2021 10:48PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Gina Lee – Asia Pacific stocks were mostly down Thursday morning. U.S. shares and Treasuries gained after the U.S. Federal Reserve said in its latest policy meeting minutes that more evidence of a robust economic recovery from COVID-19 would be needed to set an asset tapering timeline.

Japan’s Nikkei 225 fell 0.70% by 10:39 PM ET (2:39 AM GMT), ahead of a decision on declaring a fresh state of emergency in the country due later in the day. Japanese economy minister Yasutoshi Nishimura told an advisory panel on Thursday that the move, covering Tokyo, would be in place from Jul. 12 to Aug. 22.

The proposed period also covers the entire duration of the Tokyo Olympic Games. A decision in favor of the state of emergency could see spectators banned from the games, which are due to open in less than three weeks.

South Korea’s KOSPI fell 0.72%. The country reported 1,275 daily COVID-19 cases as of Jul. 8, with the number exceeding the record set in December 2020.

In Australia, the ASX 200 was up 0.28% while Hong Kong’s Hang Seng Index slid 1.92%.

China’s Shanghai Composite was down 0.55% while the Shenzhen Component was gained 0.52%, with the consumer price index and producer price index due to be released on Friday. Also on investors’ radar is a State Council hint that the People's Bank of China could cut its reserve requirement ratio for banks to give the economy a boost.

U.S. shares closed at all-time highs, while benchmark 10-year U.S. Treasury yields steadied around 1.31%, after falling for seven trading days, as inflation expectations continue to decrease.

The minutes from the Fed’s June meeting, released on Wednesday, did not provide the hoped-for clues to the central bank’s asset tapering schedule.

The Fed took markets by surprise with its hawkish tone when it handed down its latest policy decision in June. Although ongoing uncertainty about the economic recovery made officials reluctant to communicate this schedule, they wanted to be prepared should asset tapering be needed sooner than expected.

Across the Atlantic, the European Central Bank will release the outcome of an 18-month strategy review later in the day, in which it will reportedly raise its inflation goal to 2% and allow room for any required overshoot. Finance ministers and central bankers from the Group of 20, or G20, will also meet in Venice on Friday.

Some investors remain optimistic, however.

“I think the Goldilocks scenario will last for quite a while... we are at a point where the central banks all over the world have very much a desire to keep interest rates low and fortunately, we have not seen any long-term significant signs of inflation,” Dalton Investments chair Belita Ong told Bloomberg.

Meanwhile, the number of COVID-19 deaths passed the four million mark as of Jul. 8, according to Johns Hopkins University data.

Asian Stocks Down, “Goldilocks” Central Bank Scenario Continues

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Joey Joey
Joey Joey Jul 07, 2021 11:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Scam in US market continues
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email