(Bloomberg) — Stocks in Asia slipped as investors awaited readings on US inflation for clues on the Federal Reserve’s interest-rate path.
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Japan’s Nikkei-225 Stock Average declined for a fourth day, set for its longest losing streak since October. Traders also continued to assess the likelihood of an interest rate hike by the Bank of Japan, which will be its first since 2007.
The BOJ was again in the spotlight after officials were said to be considering an end to exchange-traded fund purchases the central bank began in 2010. The move came as inflation in Japan climbed toward the BOJ’s target.
“Markets have a close eye on US producer price data later today, as it could be used to confirm or deny this week’s hotter CPI report,” said Matt Simpson, a senior market strategist at City Index Inc. “That seems to be suppressing volatility more than usual in today’s Asian session, not helped by the lack economic data this session.”
Equities in mainland China and Hong Kong fluctuated between gains and losses. That’s after officials pledged central government funds to encourage consumers and businesses to replace old equipment and goods, a pillar of its plan for economic growth of about 5% this year.
Shares related to Asian copper miners advanced after the metal jumped to an 11-month high on potential capacity cuts at Chinese smelters.
Contracts for US equities were also little changed as investors await more clues on whether the recent uptick in US consumer prices was just a blip or an indication the disinflationary trend has hit a roadblock. The mixed trading followed a listless US session on Wednesday with the S&P 500 ending lower and the tech-heavy Nasdaq 100 falling 0.8%.
US data due later in the week will offer further signs of the health of the US economy and the effect of monetary policy. The Federal Reserve’s interest rate decision is due next week.
FX Lethargy
Treasuries steadied in Asia after selling off Wednesday with the 10-year yield rising four basis points. An index of the dollar was steady after a decline in the previous session, and the yen was marginally stronger at around 147 per dollar.
Markets are getting very comfortable with a soft-landing scenario lubricated by almost-synchronized global central bank easing, according to Alvin Tan, head of Asia FX strategy at RBC Capital Markets in Singapore. “At this point, it’s fair to say that nothing much is really happening in FX space, except perhaps for the yen,” he wrote in a note. “We’ll need some sort of global market shock to shake FX out of its lethargy.”
ByteDance Ltd. was in focus after the US House of Representatives passed a bill to ban TikTok in the US unless its Chinese owner sells the video-sharing app.
In commodities, oil held the biggest gain in about five weeks after US crude stockpiles shrunk and Ukraine attacked another Russian refinery. Gold steadied.
Elsewhere, Nippon Steel Corp. fell on a report that President Joe Biden is expected to soon release a statement of concern about the company’s proposed purchase of United States Steel Corp. US Steel dropped as much as 15%, its biggest intraday loss since June 2020.
Key events this week:
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US PPI, retail sales, initial jobless claims, business inventories, Thursday
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China property prices, Friday
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Japan’s largest union federation announces results of annual wage negotiations, just ahead of Bank of Japan policy meeting, Friday
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Bank of England issues inflation survey, Friday
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US industrial production, University of Michigan consumer sentiment, Empire Manufacturing, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.1% as of 11:45 a.m. Tokyo time
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Nasdaq 100 futures rose 0.3%
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Japan’s Topix was little changed
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Australia’s S&P/ASX 200 was little changed
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Hong Kong’s Hang Seng fell 0.1%
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The Shanghai Composite rose 0.1%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro was little changed at $1.0945
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The Japanese yen was little changed at 147.84 per dollar
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The offshore yuan was little changed at 7.1978 per dollar
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The Australian dollar was little changed at $0.6619
Cryptocurrencies
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Bitcoin was little changed at $73,139.01
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Ether rose 0.1% to $3,997.76
Bonds
Commodities
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Richard Henderson.
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