Asian equities moved in different directions on Monday as traders navigated through a thin holiday trading session. While Chinese markets showed gains, Japan’s stocks faced losses. Other major markets in the region stood closed for the Easter holiday, complicating the trading landscape.

Trading volumes plummeted significantly, with stock exchanges in Australia, New Zealand, and Hong Kong shuttered. Investor sentiment remained muted following a global equity pullback last week, with persistent worries over inflation and trade policy hanging in the air.

Chinese Stocks Gain After PBOC Holds Rates Steady

Chinese equities saw slight gains after the People’s Bank of China (PBOC) announced it would keep its benchmark loan prime rates (LPR) steady. The one-year LPR stayed at 3.1%, and the five-year rate, critical for mortgages, remained at 3.6%.

This move aligned with market expectations and indicates the government’s preference for fiscal stimulus rather than monetary easing to support the economy. Authorities have introduced further fiscal efforts, including subsidies for household goods and expanded social welfare programs, to boost domestic consumption.

• Shanghai Composite: +0.3%

• CSI 300 Index: +0.2%

Nikkei Struggles After Inflation Surprises

Meanwhile, Japanese equities faced downward pressure as a stronger-than-expected March inflation reading complicated the Bank of Japan’s (BOJ) monetary policy outlook.

• Core CPI (excluding fresh food): +3.2% YoY

• Core-Core CPI (excluding fresh food and energy): +2.9% YoY, up from 2.6% in February

This data highlights ongoing inflation pressures, keeping core CPI significantly above the BOJ’s 2% target. Despite this, some analysts are pushing their expectations for a rate hike from May to July, given global uncertainties, especially concerning U.S. tariffs.

• Nikkei 225: -1.2%

• TOPIX: -1.1%

Regional Overview

• South Korea’s KOSPI: Flat

• Thailand’s SET Index: -0.4%

• Singapore’s Straits Times Index: +1.0%

• India’s Nifty 50 Futures: +0.4%

Investors are cautious amid heightened trade tensions. Reports indicate that China might be open to resuming trade discussions with the U.S. while seeking a more respectful relationship. U.S. President Donald Trump noted that substantial progress had been made following meetings with Japanese trade representatives, which helped alleviate some market worries. Yet, concerns over tariffs and their global economic implications continue to trouble sentiment.

U.S. Futures Dip in Early Asian Session

Futures linked to major U.S. indexes opened lower during the Asian trading session after a week of losses on Wall Street. Investors remain cautious as they absorb inflation data, central bank signals, and changing global trade dynamics.

Market Insights

• Economics Calendar Overview
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• Forex Daily Monitor
  Track currency fluctuations across Asia, particularly USD/JPY and USD/CNY, in response to rate and inflation expectations.

Wrapping Up

Monday’s trading session highlighted regional policy divergence, with China opting for fiscal measures while Japan grapples with lingering inflation. With key markets closed and overall uncertainty surrounding trade and central bank decisions, investors seem to favor a cautious approach.

Market participants will closely monitor the upcoming developments in the U.S.-China trade discussions and the upcoming central bank meetings for further direction.