The active central bank agenda this week provided significant support for stock market bulls, particularly with the Federal Reserve opting for a dovish stance and the surprise rate cut by the Swiss National Bank, hinting at potential easing measures by other central banks later this year.
Still, equities in Asia appear poised for a mixed opening on Friday, with the stronger US dollar indicating that investors are reassessing the optimism that drove the region's shares higher in the previous session. This shift comes as new indications of ongoing inflation emerge in the US. US economic data released on Thursday bolstered the argument that the Federal Reserve may need to reconsider its forecasts for interest rate reductions.
Investors and economists are divided on whether the Bank of Japan has concluded its interest rate hikes for the year or if further moves are on the horizon. Governor Ueda suggested that if inflation exceeds expectations, the possibility of another rate hike remains. A crucial factor in this decision will be the trajectory of consumption. Should consumption rebound, it would provide a favourable backdrop for the BOJ to consider additional rate hikes.
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