Chinese Technology Stocks Shine in Asia as Yen Weakens: Market Recap

Chinese tech stocks surged ahead of earnings reports from industry giants Tencent Holdings Ltd. and Alibaba Group Holding Ltd., driving the Hang Seng Tech Index up by more than 1%. Investors are eagerly awaiting the results, hoping for strong earnings and positive guidance to sustain the recent rally in Chinese stocks.

According to Chris Weston, head of research at Pepperstone Group, the market is looking for both Tencent and Alibaba to exceed consensus results to maintain confidence in the ongoing stock market momentum. Meanwhile, Japan saw steady stock performance, while Australian shares dipped slightly.

In Japan, the 20-year government bond yield reached its highest level since 2013 amid speculation that the central bank may reduce debt-buying amounts. The yen weakened against the US dollar for the third consecutive session, while US 10-year Treasury yields remained stable.

With concerns about a patchy economic recovery in China, any earnings misses from Tencent and Alibaba could potentially dampen market enthusiasm. Hong Kong markets will be closed on Wednesday for a holiday, so initial reactions to the earnings reports will be seen in the Nasdaq Golden Dragon China Index.

Looking ahead, US futures dipped slightly in Asian trading, following a flat close for the S&P 500. Economists are eagerly awaiting US inflation data later in the week, with Federal Reserve Chair Jerome Powell scheduled to speak. The upcoming US consumer price index report is expected to show moderation but remain at levels that may not warrant rate cuts.

Overall, investors are bracing for potential market volatility following key economic data releases and corporate earnings reports in the coming days.