By Asia equity markets moved cautiously on Wednesday amid a mix of positive and cautious signals rooted in Japan’s improved business mood, India’s monetary stance, and broader global uncertainties.
The BOJ’s tankan survey showed an uptick in confidence: large manufacturers’ sentiment rose to +14, and non-manufacturers stayed at +34. Companies expect capital expenditures to grow over 12%, up from earlier estimates. Reuters These figures have fueled speculation that the BOJ may further tighten monetary policy in the coming months, especially as hawkish voices gain influence.
But companies are also wary of a softer outlook ahead. Many list risks like U.S. tariffs, weaker export demand, and rising labor costs as headwinds to future sentiment.
In India, the RBI’s decision to hold its policy rate at 5.5% was largely anticipated. The central bank signaled a cautious approach, adjusting its forecasts to strike a balance between inflation control and economic growth. The Economic Times+1 Inflation in India has moderated, and spending remains resilient, giving the RBI room to maintain stability.
Broader regional markets reflected divergent trends. In Japan, fears of a further rate hike put pressure on exporters and the Nikkei index. Meanwhile, South Korea and Taiwan saw gains, particularly in tech. AP News+1 Markets also remained alert to the risk of U.S. federal funding disruptions, which could delay major economic data releases.
As Asia moves forward, investor focus will be on upcoming inflation reports, global growth signals, and central banks’ next moves.