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Asian Markets Are Strong, Japan Awaits Monetary Policy Statement

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Economic calendar

8:30 AM EST – US building permits (June)

8:30 AM EST – US housing starts (June)

10:30 AM EST – US crude oil inventories

7:50 PM EST – Japan’s exports and imports (June)

7:50 PM EST – trade balance (June)

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China

China’s Shanghai Composite Index started this week on a weaker note by falling to almost three-week low price levels on Monday. The Shanghai Composite Index regained strength on Tuesday. On July 19, Chinese markets continued to recover and rose to the highest levels in three months.

The risk appetite in Chinese markets decreased at the beginning of the week amid comments from President Xi Jinping that raised regulatory concerns. He called for the central bank to strengthen regulations to defend China’s economy against financial risks. On July 19, Chinese markets moved higher amid increased buying in blue-chip stocks. China’s stronger-than-expected GDP, industrial production, and retail sales increased the demand for blue-chip stocks.

On July 19, the Shanghai Composite Index rose 1.4% and ended the day at 3,230.98. The SPDR S&P China ETF (GXC) rose 0.53% to $94.1 on July 18.

Hong Kong

Hong Kong’s Hang Seng Index gained in all of the trading days last week and opened this week on a stronger note. After trading with subdued momentum for two days, the Hang Seng Index opened higher and rose to two-year high price levels. The rally in China Shenhua Energy and Tencent Holdings helped the Hang Seng Index rise for eight consecutive trading days. The Hang Seng Index rose 0.56% and closed the day at 26,672.16. The iShares MSCI Hong Kong ETF (EWH) rose 0.13% to $23.79 on July 18.

Japan

Japan’s Nikkei Index started this week on a weaker note by falling below 20,000 on Tuesday. On July 19, Nikkei opened the day lower but regained strength as the day progressed. It closed the day almost flat above the 20,000 level. The market is looking forward to trade balance data and the Bank of Japan’s monetary policy statement scheduled to release today.

Nikkei rose 0.10% and closed the day at 20,020.86. In the next part, we’ll discuss how European markets performed in the morning session on July 19.

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