Markets Juggle Growth Data and Expect Capex Shifts: Japan's Economy Stalls

Asian shares extended their recent robust performance on Monday, despite diminished activity as the Lunar New Year holiday led to light trading. Japan's economic data, however, disappointed with a mere 0.2% annualized growth, well below forecasts, posing a challenge for Prime Minister Sanae Takaichi in stimulating the economy.

Japan's Nikkei showed modest gains of 0.2% following a 5% surge last week, while broader Asia-Pacific shares nudged up 0.4%. South Korea and Taiwan witnessed significant market rallies, though concerns linger about the sustainability of tech stock performances, according to Vantage Point's Nick Ferres.

In the U.S., futures indicated slight gains while attention turns to manufacturing data and GDP reports due Friday. With hyperscale capex surging, analyst sentiments suggest a tightening of buybacks, reinforcing the importance of shareholder returns. Bond markets remained attractive amid expectations of Federal Reserve rate cuts.