Asia report: Markets mixed as investors await US inflation data

Equity markets in Asia were in a mixed state as they closed on Thursday, as investors closed their wallets ahead of the much-anticipated United States consumer price index later in the global day.

In Japan, the Nikkei 225 was up 0.34% at 28,958.56, as the yen strengthened 0.11% against the dollar to last trade at JPY 109.51.

Technology giant SoftBank Group was down 0.63%, while among the benchmark’s other major components, robotics specialist Fanuc was up 1.75% and Uniqlo owner Fast Retailing added 0.54%.

The broader Topix index went the other way in Tokyo, closing down 0.02% by the end of trading at 1,956.73.

On the mainland, the Shanghai Composite was ahead 0.54% at 3,610.86, and the smaller, technology-centric Shenzhen Composite was 1.09% higher at 2,422.58.

South Korea’s Kospi gained 0.26% to 3,224.64, while the Hang Seng Index in Hong Kong slipped 0.01% to 28,738.88.

The blue-chip technology stocks were mixed in Seoul, with Samsung Electronics down 0.12%, while SK Hynix rose 0.41%.

Investor attention was very much turned across the Pacific Ocean on Thursday, ahead of the release of US inflation data later in the day.

Consensus expectations for headline inflation have consumer prices rising at the fastest cadence in 13 years, at 4.7%.

“If there is a worry about inflation - today's US CPI print will tell us a lot - then the bond market is not showing it,” said Markets.com chief market analyst Neil Wilson.

He noted that US 10-year yields had fallen below 1.49% to the lowest level in three months.

“This is not just a Fed thing - the yield on longer-dated paper such as the 30-year is also well off its 2021 highs.

“Today’s inflation reading still poses a risk to the market - the annual rate is forecast to climb to 4.7% in May, from 4.2% in April, whilst the core reading is seen at 3.4%, with the month-on-month at 0.4%.”

Wilson said that, with the Federal Reserve anchoring its policy goals to employment, another hot reading was not “too much” to worry about.

“Nevertheless, the print will still lead to some volatility at 1330 BST in index futures, numerous foreign exchange crosses, and gold.

“An above-forecast inflation reading would reignite market taper fears, albeit this is likely to be short-lived and one to fade as the Fed still has control of this, at least to the extent that the market believes it does.”

Oil prices were in the green as the region went to bed, with Brent crude up 0.11% at $72.30 per barrel, and West Texas Intermediate 0.06% firmer at $70.00.

In Australia, the S&P/ASX 200 was up 0.44% at 7,302.50, as the hefty financials subindex also advanced 0.44%.

Among the country’s ‘big four’ banks, Australia and New Zealand Banking Group was down 0.14%, while Commonwealth Bank of Australia rose 0.76%, National Australia Bank added 0.23%, and Westpac Banking Corporation managed gains of 0.15%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was 0.39% weaker at 12,518.01, led lower by cinema technology company Vista Group, which lost 3.4%.

The down under dollars were both stronger on the greenback, with the Aussie last ahead 0.09% atr AUD 1.2922, and the Kiwi advancing 0.06% to NZD 1.3922.