Asia’s major stock indexes saw a mixed session of trading on Wednesday as investors waited on the latest inflation data due out of the US later in the day.
Shares across the region drifted as traders weighed mixed US producer price data and braced for the crucial consumer price report that is more likely to influence the Federal Reserve’s near-term policy path.
Data overnight showed US producer prices increased more than expected in April, indicating that inflation remained stubbornly high early in the second quarter.
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Japanese shares erased most of their early gains to end flat, as caution regarding the domestic corporate outlook and key US inflation dented sentiment.
The Nikkei share average inched up 0.08% to close at 38,385.73, after rising more than 1% earlier in the session. The broader Topix also pared early gains to end flat at 2,730.88.
Sony Group jumped 8.23% after the tech and entertainment conglomerate pledged to boost shareholder returns and forecast higher annual profit.
Mainland China shares inched lower, pressured by US President Joe Biden’s decision to levy fresh tariffs on Chinese goods. Markets in Hong Kong were closed for a public holiday.
Biden unveiled steep tariff increases on Tuesday on an array of Chinese imports including electric vehicle (EV) batteries, computer chips and medical products, risking an election-year stand-off with Beijing as he woos American voters who give his economic policies low marks.
The tariffs are considered as a fresh sign of escalations in Sino-US relations, which have long been one of the key factors influencing Chinese financial markets.
The Shanghai Composite Index lost 0.82%, or 25.87 points, to end at 3,119.90, while the blue-chip CSI300 index was down 0.85% at 3,626.06 points. The Shenzhen Composite Index on China’s second exchange fell 0.76%, or 13.42 points, to 1,759.58.
The market did not react much to China’s central bank’s decision to leave a key policy rate unchanged while rolling over maturing medium-term lending facility (MLF) loans on Wednesday, in line with market expectations.
Elsewhere across the region, in earlier trade, Sydney, Taipei and Jakarta rose but Singapore, Wellington, Mumbai, Bangkok and Manila fell. Seoul was also closed for a holiday.
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MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.65%, scaling a fresh 15-month high and taking its gains to 4% so far this month.
All eyes are now on the US consumer prices report that could dictate the path of Federal Reserve policy. The data is expected to show CPI rose 0.3% month-on-month in April, down from a 0.4% growth the previous month, according to a Reuters poll.
European bourses also looked set for a higher open, with Eurostoxx 50 futures up 0.28%, German DAX futures 0.29% higher and FTSE futures 0.45% advanced.
In the currency market, the dollar was on the back foot as traders remained hesitant to make moves ahead of the CPI report, with the euro touching a fresh one-month high of $1.0828.
The dollar index, which measures the US currency against six peers, was last at 104.97. The yen was last at 156.29 per dollar, having touched a two-week low of 156.80 on Tuesday, with traders wary of another bout of interventions from Japanese authorities.
The yen touched a 34-year low of 160.245 per dollar on April 29, triggering rounds of aggressive yen-buying that traders and analysts suspect was the work of the Bank of Japan and Japanese finance ministry.
In commodities, oil prices edged higher as large wildfires were threatening Canada’s oil sands and as the market expected US crude oil and gasoline inventories to show a drawdown later in the day.
US crude was up 0.68% at $78.55 per barrel and Brent was at $82.87 per barrel, up 0.59%. Spot gold was little changed at $2,356.64 per ounce.
Key figures
Tokyo – Nikkei 225 > UP 0.08% at 38,385.73 (close)
Hong Kong – Hang Seng Index <> CLOSED
Shanghai – Composite < DOWN 0.82% at 3,119.90 (close)
London – FTSE 100 > UP 0.48% at 8,468.48 (0936 BST)
New York – Dow > UP 0.32% at 39,558.11 (Tuesday close)
- Reuters with additional editing by Sean O’Meara
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