Asia: Stocks mostly lower as Japanese inflation eases

Asian stocks were mostly lower as Japan’s inflation slowed in August, adding pressure on the central bank to address weak prices.

Japan’s consumer price index (CPI) fell to 3.3% year-on-year from 3.4% in July, as expected.

Excluding food, CPI eased to 3.1% in August from 3.3% a month earlier, missing forecasts of 3.2%.

The data highlights the risks facing Bank of Japan (BoJ) Governor Haruhiko Kuroda in his push for prices to rise 2%.

“Softer Japanese CPI data reinforced fears of more BoJ easing which could hurt the JPY," analysts at UnicreditResearch said.

Alpari UK market analyst Joshua Mahony said "with Japanese CPI pulling back, a German consumer confidence survey expecting to fall, and the UK likely to announce their willingness to act in Iraq, there is little to be positive about today.

"Stripping out the 2% rise that was attributed to the sales tax hike in April, the subsequent figure of 1.3% is the lowest level since October 2013 and proves that the recent trend is no short term phenomenon."

In currency markets, the yen dropped toward a six-year low against the dollar on speculation Japanese Prime Minister Shinzo Abe's government will enact reforms to the nation's $1.2trn pension fund.

The yen fell 0.3% to 109.07 per dollar at 7:30 in London.

Japan’s Nikkei 225 ended 0.88% lower.

In China, theHang Seng dropped 0.38% while Shanghai rose 0.11% amid reports on change in leadership at China’s central bank.

Weighing on markets globally was news of a Russian draft law that would allow the seizure of foreign assets in the country.

In corporate news PT Bank Mandiri declined in Jakarta after Indonesia’s parliament passed a law scrapping direct local elections, ending 10 years of regional democracy.

Fanuc Corp. gained after the Japanese maker of industrial robots raised its annual profit forecast.