Asia-Pacific markets rose on Monday, led by Japan’s Nikkei 225, which gained 2.26% after a U.S. inflation report on Friday raised expectations for a potential interest rate cut.

The Topix index increased by 2.02%, and the Japanese yen strengthened by 0.18% to 153.44 against the dollar.

The U.S. June personal consumption expenditures price index rose 0.1% month-on-month and 2.5% year-on-year, matching economists’ estimates.

This week, the focus in Asia is on the Bank of Japan’s monetary policy meeting starting July 30.

A Reuters poll suggests the central bank may raise rates by 10 basis points to 0.1%, while ING analysts predict a 15 basis point increase and a reduction in bond purchases, CNBC has reported.

They noted that the economy appears to be recovering after a contraction in early 2024, supported by solid wage growth.

Additionally, key inflation data from China and Australia’s upcoming inflation report will be monitored ahead of the Reserve Bank of Australia’s Aug. 6 meeting.

Written by B.C. Begley