Asia-Pacific markets retreat as traders digest China data, await central bank decisions

Asia-Pacific markets slipped on Monday, reversing earlier gains as investors weighed key economic data from China and anticipated major central bank decisions, including those from the Bank of Japan (BOJ) and the People’s Bank of China (PBOC), later this week.

China’s economic data disappoints amid real estate struggles

China released a mixed batch of November economic data on Monday.

Retail sales grew by 3% year-over-year, falling short of the 4.6% expected, signaling weakening consumer demand.

Industrial production rose 5.4%, slightly surpassing forecasts, but the real estate sector continued to contract, with investment shrinking 10.4% from January to November compared to the same period last year.

The CSI 300 index, which tracks the largest stocks listed in mainland China, dropped 0.34%, while Hong Kong’s Hang Seng Index led regional losses, falling 0.7%.

Central bank decisions in focus

The BOJ is expected to maintain its policy rate when it meets on Thursday, while the PBOC will announce its one-year and five-year Loan Prime Rates (LPR) on Friday.

These rates are closely watched as they influence corporate and household loans, as well as mortgage rates, in China.

Investors are also looking ahead to the US Federal Reserve’s policy decision on December 18, with markets pricing in a 96% likelihood of a 25-basis-point rate cut, according to the CME FedWatch tool.

Market performance across Asia-Pacific

• South Korea: The Kospi hovered near the flatline, while the small-cap Kosdaq gained 0.87%. This followed political turmoil over the weekend, as South Korean President Yoon Suk Yeol was impeached. The country’s finance ministry stated it would monitor financial markets closely to address any volatility.
  
• Japan: The Nikkei 225 rose 0.16%, while the broader Topix edged slightly lower.
  
• Australia: The S&P/ASX 200 declined 0.31%, reflecting muted sentiment across the region.

Bitcoin hits a new all-time high

Bitcoin surged past the $105,000 mark on Monday, setting a record high of $106,509.

The cryptocurrency rally was buoyed by pro-crypto remarks from US President-elect Donald Trump, who expressed plans to make the US a leader in cryptocurrency.

Additionally, Texas announced plans to establish a “strategic bitcoin reserve,” further boosting investor confidence.

In the US, the Dow Jones Industrial Average fell for the seventh consecutive session on Friday, dropping 0.2%.

Meanwhile, the Nasdaq Composite gained 0.12%, and the S&P 500 closed virtually flat.

With central bank decisions and economic data dominating the headlines, Asia-Pacific markets are likely to remain volatile as traders brace for key developments later in the week.

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