Investing.com– Most Asian stocks fell on Thursday amid increasing conviction that U.S. interest rates will fall at a slower pace this year, while weak inflation data from China also added to concerns over slowing growth.
Regional markets took middling cues from a flat overnight close on Wall Street, as the minutes of the Federal Reserve’s December meeting reiterated the central bank’s hawkish outlook on rates this year.
Policymakers were also seen expressing some concerns that expansionary and protectionist policies under President-elect Donald Trump could underpin inflation.
U.S. stock index futures fell in Asian trade.
Chinese stocks fall as Dec inflation data underwhelms
China’s and indexes fell about 0.3% each, while Hong Kong’s rose slightly.
inflation remained largely flat in December, data showed on Thursday, while inflation shrank for a 27th consecutive month.
The data showed little improvement in Chinese disinflation, even as Beijing doled its most aggressive round of stimulus measures yet since late-September.
Weak consumer sentiment has been a key point of pressure on the Chinese economy, as concerns over slowing growth and a prolonged property market downturn largely deterred spending over the past two years.
The Chinese economy also faces increased headwinds from trade tariffs under Trump, although Beijing is expected to dole out even more stimulus measures to offset this.
Investors are watching for any fiscal measures aimed at shoring up consumer spending.
Japanese stocks fall as strong wage data fuels BOJ jitters
Japan’s fell 0.8% on Thursday, as did the broader index.
Local markets were spooked by data showing picked up in November, while also grew more than expected.
The strong wage data factored into fears that robust private consumption will boost inflation in the coming months, giving the Bank of Japan more impetus to hike interest rates further.
The firmed after the wage data, pressuring Japanese export stocks.
Still, the BOJ has offered scant cues on when it will raise interest rates further. The central bank had last signaled that it could wait until March’s wage negotiations before making a decision.
Broader Asian stocks largely retreated on Thursday, amid growing concerns over higher for longer U.S. interest rates.
Australia’s index fell 0.4%. data from the country read weaker than expected for November, while separate data showed a bigger-than-expected rise in its , on a recovery in commodity exports.
Singapore’s fell 0.4%, while South Korea’s was the sole gainer among its peers, rising 0.4% in an extended recovery from December’s rout. But political uncertainty in the country still remained high, amid ongoing efforts to arrest President Yoon Suk Yeol over his failed attempt to impose military law.
for India’s index pointed to a soft open, following some weak earnings from the country this week. Indian earnings are set to pick up in earnest next week.
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