SYDNEY, March 11 — Asian share markets followed Wall Street lower on Monday while the dollar looked vulnerable ahead of a reading on US inflation that could hasten, or delay, the start of global rate cuts.
The yen edged higher as data released on Monday showed Japan was not, in fact, in recession after economic growth was revised up to an annualised 0.4 per cent for the December quarter.
Reuters reported a growing number of Bank of Japan policymakers are warming to the idea of ending negative rates this month on expectations of hefty pay hikes in this year’s annual wage negotiations.
Tuesday’s US consumer price index (CPI) report for February is forecast to rise 0.4 per cent for the month and keep the annual pace steady at 3.1 per cent. Core inflation is seen rising 0.3 per cent, which will nudge the annual pace down to the lowest since early 2021 at 3.7 per cent.
The slower core would complement the softer conditions seen in the February payrolls report, where unemployment hit a two-year high of 3.9 per cent, and would keep the Federal Reserve on track to cut rates in the next few months.
Chinese price data out over the weekend showed a welcome bounce in inflation to 0.7 per cent in February, though producer prices remained mired in deflation.
Beijing also promised to improve home sales in a “forceful” and “orderly” way to support the country’s beleaguered residential property market, but was short on details.
Hopes for lower borrowing costs have been a fillip for equities with MSCI’s broadest index of Asia-Pacific shares outside Japan easing 0.3 per cent, after hitting an eight-month peak on Friday.
Japan’s Nikkei lost 1.2 per cent, having scored a succession of all-time highs last week.
— Reuters
