Asia report: Most markets fall as Japan's inflation holds steady

Asia-Pacific markets mostly declined on Friday, mirroring Wall Street's downturn as investors rotated out of tech stocks and booked profits from recent equity rallies.

Investors also digested Japan's June inflation data, which remained unchanged from May, while core inflation, excluding fresh food prices, saw an increase.

That data was seen as crucial ahead of the Bank of Japan's monetary policy meeting later in the month.

“Asian stocks and currencies dropped due to economic and geopolitical concerns, despite market optimism about interest rate cuts,” said TickMill market analyst Patrick Munnelly, adding that a global tech outage at the end of the Asian day added to the turmoil.

“The MSCI Asia Pacific Index fell over 1%, its biggest weekly decline in three months.

“Chinese stocks in Hong Kong led the region's losses, as investors were not convinced by the Third Plenum's efforts to show the economy's potential for renewed growth.

“US futures rose after the S&P 500 fell for the second consecutive session on Thursday.”

Most markets lower after Wall Street tech sell-off

Japan's Nikkei 225 fell by 0.16% to close at 40,063.79, while the Topix index declined by 0.27% to 2,860.83.

Significant losses on the country’s benchmark index included Astellas Pharma, down by 3.24%, Japan Post, which fell 3.14%, and Shimizu, which decreased by 3.13%.

Contrasting with regional trends, China's markets saw gains, as the Shanghai Composite increased by 0.17% to 2,982.31, and the Shenzhen Component rose by 0.27% to 8,903.23.

Leading the gains in Shanghai were Guangzhou Fangbang Electronics, up by 10.67%, WenYi Trinity Technology, which rose 10.03%, and Shanghai Koal Software, up 10.02%.

The Hang Seng Index in Hong Kong dropped significantly by 2.03%, ending at 17,417.68.

Major decliners included Longfor Properties, down 5.99%, China Hongqiao Group, which fell 5.9%, and China Resources Land, down 5.76%.

South Korea's Kospi index fell by 1.02% to 2,795.46, with notable losses seen in F&F, which plunged by 8.05%, Samsung Heavy Industries, down 4.7%, and HMM, which decreased by 4.17%.

Australia's S&P/ASX 200 index declined by 0.81% to close at 7,971.60.

ZIP Co led the losses with a 5.04% drop, followed by Megaport, down 5%, and Block, which fell by 4.29%.

The S&P/NZX 50 index in New Zealand saw a slight decline of 0.03%, closing at 12,325.60, as Ryman Healthcare dropped by 3.26%, KMD Brands fell by 2.44%, and A2 Milk Company decreased by 2.19%.

In currency markets, the dollar was last down 0.1% on the yen to trade at JPY 157.21 yen.

The greenback meanwhile rose 0.2% against the Aussie to AUD 1.4942, and increased by 0.32% against the Kiwi, changing hands at NZD 1.6595.

On the oil front, Brent crude futures were last up 0.02% on ICE at $85.13 per barrel, while the NYMEX quote for West Texas Intermediate fell 0.1% to $82.74.

Inflation holds steady in Japan, though core reading accelerates

In economic news, Japan's inflation rate held steady at 2.8% in June, unchanged from May's figure.

However, core inflation, which excludes fresh food prices, edged up to 2.6%, slightly below the 2.7% anticipated by a Reuters poll of economists.

Despite its increase, the core inflation rate remained lower than expected, indicating moderated inflationary pressures.

As Japan's central bank prepared for its upcoming policy-setting meeting in late July, a significant majority of economists - over 75% - believed that interest rates would remain unchanged.

Reporting by Josh White for Sharecast.com.