Amundi Asia Pacific Market Monthly Commentary - January 2022

Friday 18 February 2022

Market Commentary

January marked a challenging start to the year. Most markets across the Asia ex. Japan region posted negative returns given the faster-than-anticipated rise in real rates in the US and a sharp correction in Technology stocks globally.

The diverging monetary policy paths between China and other countries reaffirmed itself over the month. In the US, the Fed stated an interest rate hike would “soon be appropriate”, paving the way for interest rate liftoff in March. Likewise, Asian countries such as Korea, Singapore and Indonesia tightened their monetary policies with rate hikes and increased RRR (Required Reserve Ratio). Chinese authorities, on the other hand, cut various policy and quasi-policy rates. The PBOC also signaled there is still room for further policy easing in order to stabilize expectations and push for faster credit growth.

Against this backdrop, MSCI Asia ex Japan Index was down 3.12% in January (in USD terms, net dividends excluded), outperforming the MSCI World Index which returned -5.34% (in USD terms, net dividends excluded).