Asian equities cautious ahead of economic data

Tuesday saw most Asian equities trade in a narrow range as investors remained cautious ahead of several important economic data points this week. In contrast, Japanese markets saw a significant increase following a long weekend.

A flat Wall Street overnight finish served as a lacklustre indication to regional markets, as investors stayed away in anticipation of this week's highly anticipated U.S. inflation data.

In Asian trading, U.S. stock index futures remained unchanged. The U.S. consumer price index inflation data is the main source of attention for markets this week.

Interestingly, Japan's TOPIX and Nikkei 225 indices increased 1.8% and 2.3%, respectively, building on their late-week rally.

After the Bank of Japan issued hawkish signals last week, both indices fell into bear market territory. However, a weaker yen and less aggressive remarks from certain BOJ officials allowed Japanese markets to recover the majority of their losses.

Positive profits were also helpful, particularly in the semiconductor industry.

This week, traders will be closely observing the second quarter's gross domestic product figures, looking for any indications of improved growth.

Japan's economy contracted far more than anticipated in the first quarter, which damaged the international perception of the nation. However, any acceleration in growth also gives the BOJ greater leeway to raise interest rates later this year.

Chinese market underperformance continued on Tuesday, as the Shanghai Composite and Shenzhen CSI 300 moved in a flat-to-low range. The Hang Seng index for Hong Kong equally stagnated.

This week will see the release of quarterly and half-yearly financial reports from a number of the largest Chinese companies, including significant Hong Kong-listed companies Tencent, Alibaba, and JD.com.

Traders will be observing to see if Chinese companies were able to withstand the allegedly dire economic circumstances in the nation.

In addition to the profits, the nation's retail sales and industrial output numbers, which are anticipated on Thursday, will be of interest.

The key focus later today will be on the US PPI data. Due at 13:30 GMT.

(Sources: investing.com, reuters.com)