Asia report: Markets fall ahead of US inflation reading

Stock markets were in the red across the Asia-Pacific region on Thursday, as investors closed their wallets ahead of a key inflation reading out of the US later in the global day.

In Japan, the Nikkei 225 was down 0.6% at 26,237.42, as the yen strengthened 0.08% on the dollar to last trade at JPY 146.79.

Uniqlo owner Fast Retailing was up 0.13%, while robotics specialist Fanuc was down 1.06% and tech investing giant SoftBank Group slid 0.56%.

Computing firm Toshiba was in focus as well, closing up 7.38% after Kyodo News reported that a consortium led by Japan Industrial Partners was mulling a $19bn takeover bid.

The broader Topix index was 0.77% lower by the end of trading in Tokyo, settling at 1,854.61.

Fresh data out of Japan showed producer prices rising at their fastest rate in five months, with the producer price index up 9.7% year-on-year.

The Bank of Japan’s corporate goods price index, which includes the producer price index, was ahead 0.7% on the month, hastening from the 0.4% growth recorded in August.

On the mainland, the Shanghai Composite was 0.3% weaker at 3,016.36, and the technology-centric Shenzhen Component was off 0.19% at 10,817.67.

South Korea’s Kospi dropped 1.8% to 2,162.87, while the Hang Seng Index in Hong Kong was 1.87% lower at 16,389.11.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 1.08%, while SK Hynix added 0.96%.

Investors were turning their focus across the Pacific on Thursday, with inflation data for September set to be released in the US at 1330 BST.

Market consensus is for year-on-year inflation to dip slightly to 8.1%, from 8.3% in August, while core inflation is seen to have accelerated to 6.5% from a previous 6.3%.

“It feels like the markets are feeding hungrily on any scraps of good news and even the merest hint inflation is cooling would likely be taken as a sign that, despite the US Federal Reserve’s earnest protestations, the tide is about to turn on interest rates,” said AJ Bell investment director Russ Mould.

“Investors probably shouldn’t hold their breath given the trend in core inflation suggests higher prices are proving as sticky as toffee.”

Oil prices were on the front foot as the region went to bed, with Brent crude futures last up 0.08% on ICE at $92.52 per barrel, and West Texas Intermediate ahead 0.02% on NYMEX to $87.29.

In Australia, the S&P/ASX 200 slipped 0.07% to 6,642.60, while across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.51% lower at 10,817.48.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.16% at AUD 1.5905, and the Kiwi advancing 0.31% to NZD 1.7772.

Reporting by Josh White at Sharecast.com.