Asian Shares track Wall Street’s inflation optimism, yen recoups losses

Sydney, Feb. 14 (BNA): Asian stocks tracked a bounce on Wall Street on Tuesday, as investors remained confident that key US economic data due later will show a drop in inflation, while the yen clawed back losses as Japan nominated a new central bank. Governor

The Japanese currency weakened amid uncertainty surrounding the next governor of the Bank of Japan. The government named academic Kazuo Ueda on Tuesday to pick the job, a surprising choice that could improve the odds of ending the unpopular revenue control policy.

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rebounded 0.3%. Japan’s Nikkei (.N225) rose 0.5%, Reuters reports.

Chinese stocks reversed previous gains to fall today, with blue chips (.CSI300) falling 0.1% and Hong Kong’s Hang Seng Index (.HSI) losing 0.3%.

In some positive geopolitics news, US Secretary of State Antony Blinken is considering meeting senior Chinese diplomat Wang Yi at the Munich Security Conference this week, after the US shot down what it said was a Chinese spy balloon and other flying objects of unknown origin. .

Later on Tuesday, the US Bureau of Labor Statistics will release consumer price index data for January, which is expected to show how effective the Fed’s policy tightening is in taming inflation.

Analysts expect the core CPI to rise 0.5% in January, with the core figure rising 0.4%, compared to 0.3% in the previous month, according to a Reuters poll. On a yearly basis, consumer price inflation probably eased to 6.2% from 6.5% in December.

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Overnight on Wall Street, the S&P 500 (.SPX) was up 1.2%, the Nasdaq (.IXIC) was up 1.5% and the Dow Jones (.DJI) was up 1.1%.

“The bottom line for us is double. First, inflation is coming down, but it’s not going to be a soft landing. A return to target for inflation this year was never likely, so patience is required regardless,” said Seth Carpenter. , chief global economist at Morgan Stanley.

“But secondly, the recent high wage inflation does not mean the Fed has failed. Service inflation is not off target, the wage-inflation link is there, but it is small, and both service-wage and price inflation are trending downward despite a strong labor market.”

Treasurys were largely flat, with the yield on the benchmark 10-year government bond mostly unchanged at 3.7073%.

Two-year bond yields also fell from a three-month high to hover at 4.5154%, compared to a previous close of 4.5340%.

In currency markets, the dollar remained lower ahead of inflation data, after suffering a 0.3% loss against its major peers in the past session.

It slipped 0.2% against the Japanese yen, to 132.13 yen, after rising 0.8% the day before.

Yields on 10-year Japanese bonds hovered at 0.5% – hitting the upper end of a range imposed by the Bank of Japan – as investors bet that the yield control policy will eventually die out under the new ruler.

BlackRock Investment Institute on Monday cut Japanese stocks to “underweight,” saying the Bank of Japan’s (BOJ) policy shift away from its ultra-loose monetary strategy could push global yields higher and reduce risk appetite.

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In the oil market, Brent crude futures fell 1% to $85.77, while US West Texas Intermediate (WTI) also fell 1.3% to $79.1.

Gold was a little higher. Spot gold was trading at $1,855.59 an ounce.


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