Asian equities rose slightly as a week heavy with central banks and inflation approaches

Tuesday saw a minor increase in most Asian stocks, with Japanese markets seeing a boost from the Bank of Japan's dovish view. However, traders remained cautious due to China and a plethora of incoming data.

The main emphasis of the markets was on the consumer price index (CPI) inflation statistics that the United States would be releasing later in the day. Additionally, the Federal Reserve's interest rate decision on Wednesday was highly anticipated to determine the direction of U.S. monetary policy in 2024.

One of the better performing indexes in Japan for the day was the Nikkei 225, which continued its strong gains from Monday following reports in the media that the BOJ stated it did not believe there was a pressing need to quickly wind down its ultra-dovish stance.

Based on the reports, Japan will continue to have a relatively loose monetary policy for the foreseeable future, setting it apart in a world where interest rates are generally high. This idea had a major role in this year's surge in the Japanese stock market.

According to data released on Tuesday, producer inflation in Japan increased somewhat in November as well, although the result did not significantly increase betting on a BOJ turn.

While the Shanghai Composite traded inside a narrow range, China's blue-chip Shanghai Shenzhen CSI 300 was close to five-year lows. A rise in real estate equities led to a 0.8% increase in Hong Kong's Hang Seng index as investors anticipated further government assistance for the troubled industry.

Local equities had a significant decline on Monday following the release of data over the weekend indicating that China's disinflation in November continued. However, the majority of the day's losses had been recovered amid rumours that Chinese state funds were acquiring regional exchange-traded funds.

The findings coincide with Beijing's ongoing efforts to support economic development and bolster investor confidence in the nation in the wake of a run of bleak November economic data. Among the poorest performing Asian stock markets this year are Chinese ones.

India's Nifty 50 index futures opened in a subdued manner after the index moved lower from record highs on Monday.

The primary focus is on the Indian CPI inflation data, which is anticipated later in the day and comes only a few days after the Reserve Bank issued a warning about a possible jump in prices.

Increased inflation is not good news for India's economy, which is one of the world's fastest-growing major economies this year. One of the main drivers of the Nifty's record-high run over the last two weeks was optimism about this expansion.

(Sources: investing.com, reuters.com)