Asian markets hike ahead of US inflation data

Asian stocks rose on Tuesday ahead of the US inflation report, while Japanese shares fell and the yen strengthened amid expectations that the Bank of Japan (BOJ) may exit ultra-easy monetary policy soon, Reuters reported.

Gold hovered below its record peak, and the dollar remained stable as traders awaited the US consumer price index report to predict the Federal Reserve’s rate-cutting plans.

The MSCI Asia-Pacific index outside Japan was up 0.20 per cent, close to a seven-month high. Chinese stocks, led by tech shares, rose, with Hong Kong’s Hang Seng Index up 0.75 per cent and the CSI300 index 0.13 per cent higher.

Japan’s Nikkei extended its decline, down 0.84 per cent, as speculation grew about a shift away from ultra-loose monetary policy by the BOJ. The yen strengthened to 147.26 per dollar.

BOJ policymakers are considering ending negative interest rates this month due to expected pay hikes in annual wage negotiations.

The bank’s governor Kazuo Ueda noted moderate economic recovery but highlighted recent data weaknesses.

Futures suggest a 50 per cent chance of the BOJ shifting rates to zero at its March meeting, with some expecting a move in April. Analysts debate whether the BOJ will end negative rates or start a tightening cycle.