Mitsubishi Motors gains over 6% due to reports of joining forces with Honda-Nissan alliance
Nikkei 225 up 2.26%
Personal consumption expenditures price index rises 0.1% month-on-month and 2.5% year-on-year in June
Topix up 2.02%
Asian stocks kicked off the week with gains on Monday, following Wall Street's upward trend, as investors awaited major central bank decisions and tech earnings releases. Most economists anticipate the Federal Reserve to signal plans for a September rate cut. The Bank of Japan is expected to announce quantitative tightening and possibly hike its key rate at its policy meeting on Wednesday.
The US economy showed signs of recovery, with personal consumption expenditures price index rising 0.1% month-on-month and 2.5% compared to the same period last year in June. The Nikkei 225 led gains in Asia, up by 2.26%, while the Topix rose by 2.02%. Japan's economy is back on a recovery track after an unexpected contraction in the first quarter of 2024, and solid wage growth for May is expected to give more confidence to the central bank.
Mitsubishi Motors was one of the top gainers in the Nikkei index, rising over 6% after reports that it will join forces with Honda-Nissan alliance to standardize in-vehicle software. The tie-up, whose members sell more than 8 million vehicles worldwide, will consolidate the domestic market into two forces: the Toyota Motor Group and the Honda-Nissan-Mitsubishi alliance.
Central banks in Tokyo, Washington, and London are holding meetings this week. The Federal Reserve and Bank of England are also expected to make decisions on interest rates. Traders are struggling to decide if the Bank of Japan will hike rates and then when and by how much the Federal Reserve and Bank of England will cut them.
