Asia ETF Roundup (Market) – April 2022

U.S. inflation hit 40-year high. Sharp moves in currency market. 

Jackie Choy, CFA 05 May, 2022 | 9:58
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For the latest ETF industry news, please refer to our “Asia ETF Roundup (Industry) – April 2022”.

Major Markets Performance

Global markets had a tough April.  The U.S. saw inflation hit a 40-year high in March and the Morningstar US Market Index plunged 9.0%. In Asia, the Bank of Japan continued to purchase 10-year government bonds at a yield of 0.25%. The Morningstar Japan index dropped 8.6% (which reflects a 6.3% depreciation in the Japanese Yen).

There were also big moves in currency markets in April. The U.S. dollar appreciated 4.7%, as proxied by the ICE USD Spot rate. Conversely, the Euro depreciated 5.2% against the U.S. dollar. The Japanese Yen depreciated against the greenback by 6.3% in April, following a 5.1% decline in March. This put the Yen’s year-to-date depreciation at 11.1%. The Chinese Yuan took a sharp turn in April, as it depreciated 3.7% against the U.S. dollar.

Precious metals’ performance was poor in April. Gold, platinum and silver prices fell anywhere from 2% to 5%.image

Economic and Market News

South Korea Hikes Rates by 0.25%; BOJ Continues Unlimited Bond Purchases

  • South Korea Raises Rates by 25 bps – On 14 April, the Bank of Korea hiked rates by 25bps to 1.50%. The Bank last raised interest rate in January 2022.
  • Bank of Japan’s Unlimited Bond Purchases –In April, the Bank of Japan offered to purchase an unlimited amount of 10-year government bonds at 0.25% for 6 days (21, 22, 25, 26, 27 and 28 April) in effort to control its yield curve.

China Economic Data: Inflation at 1.5% in March; Caixin/Markit PMI and Official PMI Fell Further in April

  • Inflation registered at 1.5% in March, higher than the 0.9% reading in February.
  • China’s Caixin/Markit PMI fell further to 46.0 in April, from the reading of 48.1 in March. The official PMI also fell in April to 47.4 from 49.5 in March.

 

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About Author

Jackie Choy, CFA  is the Director of ETF Research for Morningstar Investment Management Asia

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