Asian stock markets showed little movement on Thursday, remaining close to their highest levels in two years as investors awaited further guidance on U.S. monetary policy. Meanwhile, the British pound steadied ahead of a Bank of England (BoE) meeting where interest rates are expected to remain unchanged.
MSCI’s broadest index of Asia-Pacific shares outside Japan hovered around 572.97, just below Wednesday’s peak of 573.38, supported by gains in the technology sector. The index is set for a 4% gain in June.
In Japan, the Nikkei fell 0.63%, while Chinese stocks also edged lower, with the blue-chip index down 0.34%. Hong Kong’s Hang Seng index slipped 0.14%.
China maintained its benchmark lending rates unchanged in its monthly fixing on Thursday, in line with market expectations despite ongoing concerns about economic stability. The onshore yuan weakened beyond 7.26 per dollar for the first time since November.
Ahead of the BoE policy decision, the pound traded steady at $1.2717, reflecting a marginal decline of 0.2% for the month of June.
Recent data indicated British inflation returned to its 2% target in May after nearly three years, reinforcing expectations that interest rates will remain stable amid the upcoming election.
Economists in a Reuters poll anticipate the BoE might initiate rate cuts by August, although markets are pricing in only a 30% chance for an August cut, predicting a move more likely in September or November. Overall, markets have priced in 43 basis points of easing from the BoE throughout the year.
Elsewhere, the Swiss National Bank is anticipated to cut its key policy rate by 25 basis points for the second consecutive meeting, while Norway’s central bank is likely to maintain its current policy interest rate.
In the technology sector, Nvidia led a global rally on Tuesday, surpassing Microsoft to become the world’s most valuable company, driving up tech shares globally. U.S. markets were closed on Wednesday, with Nasdaq futures up 0.25% in early Thursday trading.
Looking ahead, investors are awaiting signals from the Federal Reserve on the timing of its expected policy easing, following last week’s projection of a single rate cut this year. The dollar index was stable at 105.23, while the euro traded at $1.0746. The Japanese yen remained weak at 158.05 per dollar, influenced by the interest rate differential between Japan and the United States.
In commodities, oil prices showed mixed performance, with Brent crude steady at $85.08 per barrel, while U.S. West Texas Intermediate crude for June was down 0.18% at $81.42 per barrel.
Overall, market participants are closely monitoring central bank decisions and economic indicators for further insights into global market trends and monetary policy direction.
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