Investing.com – Asian shares were mixed on Monday, with Japanese markets rising on a slightly positive revision to gross domestic product data, while other Asian markets fell on rising concerns over U.S. interest rates.
Holidays in China, Hong Kong and Australia also led to lower trading volumes.
Regional markets underperformed Wall Street, which fell Friday after an encouraging nonfarm payrolls report. US futures in Asian trading have stabilized.
Risk sentiment was also somewhat impacted by the European Union elections, which showed a broader shift towards right-wing and far-right parties. French President Emmanuel Macron called for early legislative elections later in June after his party lost to Marine Le Pen’s far-right party in EU elections.
Japanese stocks rise as GDP improves
Japan’s index rose 0.7%, in line with the broader index.
First-quarter data was revised to show a slightly smaller contraction than originally expected, especially since the quarter’s contraction narrowed less than expected.
Although the revision showed the Japanese economy was not in as dire a position as initially thought, GDP data still showed the economy contracted in the first quarter amid pressure from weak consumption.
The data comes just days before the central bank is expected to tighten policy this week by slowing the pace of asset purchases. But weak GDP data also raised questions about how much headroom the Bank of Japan has to tighten policy further.
Asian shares fall amid Fed data and consumer price index
Broader Asian markets retreated, with South Korea shedding 0.7% and shedding about 1%.
On the other hand, the India index pointed to a positive opening with the index set to hit new all-time highs after the 2024 general election results caused a heavy dose of volatility last week.
Investors were largely risk-averse ahead of next week, when the central bank is expected to keep rates static and offer more policy signals.
Markets sharply lowered expectations for a September Fed rate cut after Friday’s damning report.
US inflation data will also be released this week, ahead of the Fed’s rate decision on Wednesday.