Asian stocks started a new month on a cautious note on Monday, with the Bank of Japan's surprise policy easing sparking some buying but further signs of economic weakness in China and a fall in oil prices keeping investors on guard.
The greenback continued to benefit from the growing monetary policy divergence between the U.S. and its counterparts in Europe and Asia while bonds, especially investment grade debt, received a boost after Japan's surprise decision to introduce negative interest rates last week.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent, after losing 8 percent in January.
Australia and Japan leading regional markets with gains of more than 1 percent each, while Chinese stocks slipped in early trade.
"In the short term, the surprise move by Japan will be a catalyst for global equities but it only underlines the weakness of the global economy and we need to see some strong economics data for a sustainable rally," said Cliff Tan, head of global markets research with Bank of Tokyo-Mitsubishi UFJ.
Monday's batch of economic data from China added to worries about the health of the world's second-largest economy and only increased calls for more policy easing from China.
Activity in China's manufacturing sector contracted at its fastest pace in almost three-and-a-half years in January, missing market expectations, while growth in the services sector slowed, official surveys showed on Monday.
"As deflationary pressures remain high, further reserve requirement cuts are still needed to support the slowing economy and permanently inject liquidity into the market," ANZ strategists wrote in a note. They expect a total of 200 basis points of cuts this year with a 50 basis points cut coming in the first quarter.
"In fact, refraining from further easing could risk an even weaker economy, which will then intensify depreciation expectation and capital outflows."
The Shanghai Composite Index eased 0.8 percent in early trade, while the CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.6 percent. January was the worst monthly performance for the Shanghai market since the 2008 crisis with more than a 10 percent loss.
The Bank of Japan said it would charge for a portion of bank reserves parked with the institution, an aggressive policy pioneered by the European Central Bank (ECB). Earlier in January, the ECB indicated it could cut rates further in March.
"The fact that both the BOJ and the ECB suddenly showed additional easing stance after the markets' rout suggests policymakers in Japan and Europe share concerns and take actions," Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said.
In contrast, the U.S. Federal Reserve has so far stuck to the script that it will gradually raise interest rates this year even though bets have been pared back with Federal Fund rate futures pricing in barely one hike this year.
Elsewhere, fixed income markets cheered a fresh round of policy easing from a major global central bank with investment grade debt in Asia ending a torrid January on a high note.
In government debt, the rate-sensitive U.S. two-year yield fell to a three-month low of 0.766 percent on Friday before bouncing somewhat to 0.779 percent.
The U.S. 10-year debt yield fell to 1.93 percent, edging near a double-bottom around 1.90 percent made in August-October, also helped by speculation Japanese investors will go after U.S. bonds as local bond yields plunge.
On Monday the 10-year Japanese government bond yield hit a record low of 0.050 percent while the two-year yield hit a record minus 0.100 percent.
Negative interest rates pressured the yen, which traded briefly at 121.38 to the dollar, near six-week low of 121.70 touched on Friday.
The euro was steadier at $1.08440.
Oil prices fell, with international benchmark Brent sliding 1.8 percent to $35.35 per barrel.
Still, oil has bounced more than 30 percent from a 12-year low hit less than two weeks ago, taking some pressure off reeling global equity markets but that bounce is proving to be fleeting.
A 19-commodity Thomson Reuters/Core Commodity CRB Index, a global benchmark for commodities edged higher and up more than 8 percent from a 13-year low hit in late January.
Reuters
Mon Feb 01 2016
A pedestrian holding an umbrella walks past an electronic board showing the graphs of the recent fluctuations of Japan's Nikkei average outside a brokerage in Tokyo, Japan, January 18, 2016. - REUTERS/Yuya Shino
Misteri jeritan wanita kesakitan di tengah malam
Klip yang merakamkan suara misteri teriakan wanita seperti sedang kesakitan itu turut menjadi tular di media sosial.
Dron Hezbollah sasar bandar di utara Israel
Menurut IDF dan media tempatan, tiada sebarang kecederaan dilaporkan dan hanya menyebabkan kebakaran.
Sebuah kebakaran tercetus di kawasan berumput California
Sebuah kebakaran tercetus di sebuah kawasan berumput berkeluasan 12,000 ekar di Venalis, California pada Ahad.
Insiden itu menyebabkan anggota Bomba California terpaksa bertungkus lumus memadamkan kebakaran dan arahan pemindahan secara meluas turut dikeluarkan.
Insiden itu menyebabkan anggota Bomba California terpaksa bertungkus lumus memadamkan kebakaran dan arahan pemindahan secara meluas turut dikeluarkan.
Seorang maut manakala 25 cedera ditembak di Ohio
Sekurang-kurangnya seorang maut dan 25 cedera dalam kejadian tembakan di Akron, Ohio, Amerika Syarikat.
Jabatan Polis Akron pada Ahad berkata, pihak polis menerima beberapa panggilan selepas tengah malam Ahad selepas didapati berlakunya tembakan di kawasan Kelly Ave dan 8th Ave.
Jabatan Polis Akron pada Ahad berkata, pihak polis menerima beberapa panggilan selepas tengah malam Ahad selepas didapati berlakunya tembakan di kawasan Kelly Ave dan 8th Ave.
Lebih 100,000 baucar buku ditebus dalam tempoh tiga hari
Lebih 100,000 baucar buku telah ditebus setakat Ahad.
Menteri Pendidikan Fadhlina Sidek berkata jumlah keseluruhan berjaya ditebus hanya dalam tempoh tiga hari selepas ia dibuka bermula 31 Mei lepas.
Menteri Pendidikan Fadhlina Sidek berkata jumlah keseluruhan berjaya ditebus hanya dalam tempoh tiga hari selepas ia dibuka bermula 31 Mei lepas.
e-Sukan negara terima sokongan kerajaan - Ahmad Zahid
Industri sukan elektronik (e-sukan) negara menerima khabar baik apabila Timbalan Perdana Datuk Seri Dr Ahmad Zahid Hamidi mengumumkan bahawa kerajaan akan meneruskan sokongan kepada peserta dan penggiat sukan tersebut.
Dron Hizbullah tepat sasar bandar Nahariya, Israel
Sebuah dron dilancarkan kumpulan pejuang Lubnan Hizbullah mengenai bandar pesisir pantai Nahariya di Israel pada Ahad.
Bagaimanapun menurut IDF dan media tempatan, tiada sebarang kecederaan dilaporkan dan hanya menyebabkan kebakaran.
Bagaimanapun menurut IDF dan media tempatan, tiada sebarang kecederaan dilaporkan dan hanya menyebabkan kebakaran.
Penyokong pro-Israel di New York tuntut pembebasan tebusan
Ribuan penyokong pro-Israel berarak di New York pada Ahad untuk menyambut Hari Israel dan menuntut pembebasan tebusan yang diambil dari Israel oleh Hamas dalam serangan 7 Oktober.
Perarakan yang dilakukan di beberapa jalanb di Manhattan itu menarik ahli politik berpangkat tinggi termasuk Ketua Majoriti Senat Chuck Schumer dan Gabenor New York, Kathy Hochul.
Perarakan yang dilakukan di beberapa jalanb di Manhattan itu menarik ahli politik berpangkat tinggi termasuk Ketua Majoriti Senat Chuck Schumer dan Gabenor New York, Kathy Hochul.
Penyokong Israel di New York tuntut pembebasan tebusan
Perarakan yang dilakukan di beberapa jalan di Manhattan itu menarik ahli politik kanan termasuk Ketua Majoriti Senat dan Gabenor New York.
Kebakaran di California paksa ribuan penduduk berpindah
Kira-kira 400 anggota bomba dan sokongan udara telah dikerahkan bagi memadamkan kebakaran.
Menteri Luar adakan lawatan rasmi ke China esok
Menteri Luar , Datuk Seri Hishammuddin Tun Hussein akan mengadakan lawatan rasmi ke China dari 1 hingga 2 April 2021.
Beware of the Fitch rating that can hurl Malaysia into a ditch
Credit rating agencies cannot be trusted, as the key navigator to steer the macro or micro economy of Malaysia, says Dr Rais.
Kaji selidik Monash: Pemimpin korporat Cina puas hati dengan PH
Dalam kaji selidik yang melibatkan 390 responden itu, 50 peratus pemimpin korporat Cina berpuas hati, diikuti pemimpin Melayu (39 peratus), dan pemimpin India (38 peratus).
MAS tawar diskaun tiket sehingga 50 peratus bermula hari ini
Syarikat penerbangan Malaysia Airlines kini menawarkan potongan diskaun bagi kadar tambang sehingga 50 peratus bermula hari ini sehingga sehingga 8 Mei depan.