Asian equities displayed a mixed performance during Monday’s holiday-thinned session. The Chinese stocks saw slight gains after the People’s Bank of China maintained loan prime rates, while Japanese shares struggled amid surprisingly strong inflation data.

Holiday Closures Impact Trading

• Closed Markets: Australia, New Zealand, and Hong Kong were closed for the Easter holiday, affecting overall trading volumes.

• U.S. Futures: Following last week’s declines, S&P 500 and Nasdaq futures opened lower in Asia, reflecting continuous risk aversion.

China Maintains Loan Prime Rates

• PBoC Decision: The one-year LPR held steady at 3.10%, and the five-year LPR remained unchanged at 3.60%.

• Policy Focus: Beijing signals preferences for fiscal support measures rather than further rate cuts, indicating a shift in strategy.

Japan Faces Inflation Challenges

• Core CPI: March showed a year-over-year increase of 3.2%, raising concerns about the Bank of Japan’s policy outlook.

• Market Reaction: The Nikkei 225 fell by 1.2%, reflecting the cautious investor sentiment regarding potential rate hikes amid tariff uncertainties.

Investor Caution Amid Tariff Tensions

Investors remain apprehensive due to ongoing U.S.-China tensions, especially as President Trump hints at expanding tariff negotiations. While progress has been noted in U.S.-Japan talks, uncertainty continues to keep traders on the edge.

As trading conditions stabilize post-holiday, attention will turn towards key economic data releases and central bank meetings that could further shape market trends.