Investing.com-- Most Asian stocks retreated on Monday as concerns over the Israel-Hamas war kept risk sentiment weak, with Japan’s Nikkei index leading losses amid jitters before key inflation data this week.
Markets remained on edge over a spillover in the Israel-Hamas conflict into the broader Middle East region, as Israel prepared for a ground assault on the Gaza strip. But U.S. Secretary of State Antonty Blinken said that Arab states did not want a spillover of the conflict. Still, risk appetite remained weak, also coming under pressure from fears of rising U.S. interest rates, following a stronger-than-expected inflation reading last week.The index had seen a strong run-up last week as expectations of a dovish Bank of Japan and relative strength in Japanese firms attracted a slew of foreign buyers.
But worsening risk appetite now saw investors lock-in recent profits, with tech seeing the largest degree of selling as markets also feared higher U.S. interest rates.for September, due later this week. Any signs of sticky inflation could give the BOJ more impetus to tighten policy.Still, state media said on Monday that more rate cuts by the PBOC were still on tap this year, considering that economic growth slowed substantially despite the lifting of anti-COVID measures.
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