Asian markets stuttered as attention is drawn to US inflation data

With attention shifting to important U.S. inflation data that are scheduled for release later in the day, most Asian equities fluctuated in a narrow range on Friday as a spectacular rise fueled by a dovish Federal Reserve suddenly seemed to be cooling.

A turbulent overnight session on Wall Street sent conflicting signals to regional equities, as sharp early losses were followed by a wave of cheap buying at the end, helping U.S. indexes close higher.

In recent sessions, Asian markets have seen a significant amount of profit-taking, even if the majority of regional bourses were still expecting modest weekly increases.

Prior to the release of the PCE price index data, the Fed's favoured inflation indicator, later in the day, investors were likewise wary. Expectations of early interest rate reductions in 2024 are likely to be dampened by any indications of sticky inflation.

A revised estimate of the US GDP for the third quarter indicated some growth slowdown, but not enough for the Fed to contemplate cutting interest rates too soon.

The Nikkei 225 index in Japan increased by 0.2% on Friday as it steadied following a 1.6% decline the previous day. Automobile stock losses hammered the Nikkei following the nation's largest automaker, Toyota, suspending production at a significant subsidiary following allegations of widespread misbehaviour.

According to data released on Friday, although Japanese inflation fell in November as anticipated, it was still higher than the Bank of Japan's yearly objective of 2%. Furthermore, it was unclear from the reading when the BOJ intends to change course from its extremely dovish stance.

This week, Chinese stock indices mostly trailed those of other Asian countries and fluctuated at all-time lows as worries about China's economic recovery persisted.

With a 0.2% decline on Friday, the benchmark Shanghai Shenzhen CSI 300 index was barely above a nearly five-year low that was reached on Thursday. The index was likewise headed towards its sixth consecutive week in the red.

(Sources: investing.com, reuters.com)