Asia report: Markets mixed as Tokyo inflation comes in hot

Stock markets in the Asia-Pacific region were mixed by the close on Tuesday, with technology plays in focus on the back of a buoyant Nasdaq on Wall Street overnight.

In Japan, the Nikkei 225 was up 0.78% at 26,175.56, as the yen weakened 0.32% against the dollar to last trade at JPY 132.29.

Robotics specialist Fanuc was up 0.58%, Uniqlo owner Fast Retailing added 0.98%, and tech investing giant SoftBank Group jumped 2.36%.

The broader Topix index was 0.27% firmer by the end of trading in Tokyo, settling at 1,880.88.

Fresh data out of the country showed consumer prices rising 4% year-on-year in the Tokyo region in December.

That was higher than the 3.8% economists polled by Reuters had been anticipating, and was well above the 2% inflation target set by the Bank of Japan for the notoriously inflation-allergic economy.

Consumer price data for Tokyo is generally seen as a precursor to national inflation data, which is due to be released on 20 January.

“The data offers fuel for both hawks and doves on the Bank of Japan’s policy board, with the next decision announcement due on 18 January,” said Duncan Wrigley at Pantheon Macroeconomics.

“We think that the BoJ will acknowledge the challenge of higher inflation, but stick to its guns in viewing the nature of inflation as being externally driven and cost-push rather than demand-pull.”

Wrigley said the longer headline CPI was elevated, the greater the risk of building inflationary expectations in the private sector was.

“Nonetheless, the Bank is likely to view the steadier currency and softer international prices of energy and food as underpinning an outlook for a gradual easing of inflationary pressure in 2023, though probably a more gradual downtrend than its current outlook.”

On the mainland, the Shanghai Composite slipped 0.21% to 3,169.51, and the technology-centric Shenzhen Component was 0.5% higher at 11,506.79.

South Korea’s Kospi eked out gains of 0.05% to 2,351.31, while the Hang Seng Index in Hong Kong was 0.27% lower at 21,331.46.

The blue-chip technology stocks were mixed in Korea, with Samsung Electronics down 0.49%, while SK Hynix rose 0.58%.

Data out of Seoul showed South Korea’s current account sliding back into deficit in November, for the first time since August.

According to the Bank of Korea, the economy’s balance of payments was a deficit of $620m at the end of the month, having recorded a surplus in September and October.

It was, however, still much smaller than the more-than-$3bn deficit reported for August.

The data showed a goods account deficit of $1.57bn, compared to a $6.07bn surplus a year earlier, while the services account deficit improved to $270m from $340m year-on-year.

Oil prices were firmer as the region went to bed, with Brent crude futures last up 0.13% on ICE at $79.75 per barrel, and the NYMEX quote for West Texas Intermediate 0.25% firmer at $74.82.

In Australia, the S&P/ASX 200 was down 0.28% at 7,131.00, while across the Tasman Sea, New Zealand’s S&P/NZX 50 managed a rise of 0.16% to 11,665.26.

The down under dollars were both weaker against the greenback, with the Aussie last off 0.65% at AUD 1.4562, and the Kiwi retreating 0.29% to NZD 1.5741.

Reporting by Josh White for Sharecast.com.