Asian Market Implications: Despite Trump’s comments and the US market gains, the prospect of higher tariffs and geopolitical tensions signal a testy Asian session on Monday, March 24.
Japan PMI Data Weakens BoJ Hike Prospects
Japan’s private sector PMI numbers on March 24 potentially closed the door to an H1 2025 Bank of Japan rate hike. Japan’s Jibun Bank Services PMI tumbled from 53.7 in February to 49.5 in March, crucially dropping below the neutral 50 mark. The manufacturing sector contracted at a faster pace, with the PMI falling from 49.0 to 48.3.
With services contributing over 70% to Japan’s GDP, a softer growth outlook may force the BoJ to delay rate hikes. The Japanese Yen weakened, sending the USD/JPY up 0.40% to 149.878.
Annabel Fiddes, Economics Associate Director at S&P Global Market Intelligence, commented:
“Strong inflation, coupled with concerns over labour shortages, an ageing population, subdued client spending and increased uncertainty over the international trade environment dampened optimism around the outlook. Notably, overall confidence regarding future business activity dipped to the lowest since August 2020 at the end of the first quarter.”
