By Gina Lee
Investing.com – Asia Pacific stocks were mostly up Tuesday morning, firming as investors gauge the diverging stages of economic recovery from COVID-19 in different countries.
Japan’s Nikkei 225 jumped 2.14% by 10:21 PM ET (2:21 AM GMT). Data released earlier in the day said that Japan’s GDP contracted a lower-than-expected 5.1% year-on-year and 1.3% quarter-on-quarter during the first quarter of 2021.
Japan also extended its state of emergency to three more prefectures at the beginning of the week, with the measure now covering nine prefectures in total and in place until May 31.
South Korea’s KOSPI rose 1.14%.
In Australia, the ASX 200 was up 0.60%. The Reserve Bank of Australia released the minutes from its latest meeting earlier in the day.
Hong Kong’s Hang Seng Index rose 1.45%.
China’s Shanghai Composite inched up 0.01% while the ShenzhenComponent was down 0.39%.
COVID-19 continues to be on investors’ minds, with Taiwan reporting a record 333 new cases on Monday. Hong Kong also delayed its travel bubble with Singapore for a second time as the latter detected more cases of the B.1.617 variant strain of the virus first seen in India. The World Economic Forum, scheduled to be hosted by Singapore in August 2021, has been canceled.
Meanwhile, the U.S. recorded its lowest number of both new cases and deaths related to COVID-19 since the early days of the pandemic in 2020.
Investors are also awaiting the release of the minutes from the U.S. Federal Reserve’s latest meeting, due on Wednesday, which will be scoured for any discussion on inflationary pressure and clues as to when the central bank will shift from its current dovish policy.
However, Fed Vice Chair Richard Clarida said on Monday that the previous week’s weaker-than-expected April employment report, including non-farm payrolls, indicated that “we have not made substantial further progress” on the Fed’s employment and inflation goals.
Some investors remained positive, however.
“Hotter inflation has materialized and market volatility is rising as the economic restart gathers pace,” BlackRock (NYSE:BLK) Investment Institute analysts led by Jean Boivin said in a note.
“This is playing out in line with our view that the economy is in a ‘restart.’ We prefer to look through any volatility and see a later ‘lift-off’ from zero rates than markets expect. This means higher-than-expected inflation in the medium term, and underpins our pro-risk stance,” the note added.
On the cryptocurrency front, bitcoin continued a volatile week as Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk’s tweet over the weekend continued to reverberate in the market. Coinbase Global Inc. (NASDAQ:COIN) dropped to a record low, slipping below the reference price used in its April direct listing.