Asia report: Most markets higher ahead of US inflation reading

Most bourses were positive at the end of Thursday in Asia, as investors held their collective breath ahead of the release of consumer inflation data in the United States.

In Japan, the Nikkei 225 was up 0.42% at 27,696.08, as the yen weakened 0.25% against the dollar to last trade at JPY 115.81.

Robotics specialist Fanuc was up 0.96%, while among the benchmark’s other major components, Uniqlo owner Fast Retailing was down 0.66% and technology investor giant SoftBank Group slid 2.3%.

The broader Topix index was 0.53% firmer by the end of trading in Tokyo, settling at 1,962.61.

Fresh data out of Japan showed a higher-than-expected jump in corporate goods prices in January, with the producer prices index rising 0.6% month-on-month and 0.6% on the year.

That beat forecasts for a rise of 0.4% and 8.2%, respectively.

On the mainland, the Shanghai Composite gained 0.17% to 3,485.91, and the smaller, technology-centric Shenzhen Composite slipped 0.64% to 2,302.47.

South Korea’s Kospi eked out gains of 0.11% to 2,771.93, while the Hang Seng Index in Hong Kong was 0.38% firmer at 24,924.35.

Embattled property development giant China Evergrande was in focus after it emerged the company was planning to deliver 600,000 apartments in 2022.

According to Reuters, Evergrande was not seeking a fire sale of assets to clear its debts either, after several months of investor consternation over its financial viability.

Shares in China Evergrande closed up 5.39% by the end of the session in the special administrative region.

The blue-chip technology stocks were on the front foot in Seoul, with Samsung Electronics up 0.94% and SK Hynix rising 2.78%.

Looking at the global situation ahead of the US inflation data, Swissquote senior analyst Ipek Ozkardeskaya said risk appetite was “surprisingly strong” ahead of the anticipated fresh 40-year high for price rises.

“US equity futures are pointing to the downside at the time of writing, as the US inflation data is still a threat to the overall market mood, and could be a pivot moment for this week,” Ozkardeskaya said.

“Either we will see a reasonable CPI read and the equity rally could carry on, or we will see an ugly number, and the bears will run into the marketplace and destroy the recent gains.”

Ozkardeskaya said the Federal Reserve could not perform miracles by hiking rates faster, as inflation was not necessarily on the demand side.

“One of the biggest drivers of higher consumer prices has been the supply chain crisis - Maersk, for example, which handles a fifth of containers shipped globally has been capable of raising its prices by 80% last year without putting customers off.

“Although the company warned that the supply chain crisis will improve from the second half of the year, the rising consumer prices could continue translating into higher wages and higher rents and make inflation stickier.”

Oil prices were higher as the region went to bed, with Brent crude last up 0.62% at $92.12 per barrel, and West Texas Intermediate rising 0.93% to $90.49.

In Australia, the S&P/ASX 200 was 0.28% firmer at 7,228.50, while across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.17% to 12,413.05.

The down under dollars were stronger on the greenback, with the Aussie last ahead 0.3% at AUD 1.3887, and the Kiwi advancing 0.36% to NZD 1.4915.