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Asia shares down ahead of US inflation report

Hang Seng index

Hang Seng shed 1.9% to 17,746.53, the Shanghai composite index declined 0.5%, the Nikkei 225 index was 1% lower at 39,286.97 and S&P/ASX 200 dropped 1% to 7,708.10

Shares dropped Thursday in most Asian markets ahead of a key U.S. inflation number due Friday that might point the way ahead for interest rates.

Benchmarks dropped more than 1% in Tokyo, Hong Kong and Sydney. Oil prices and U.S. futures also slipped.

The markets’ focus this week is on a U.S. government inflation report due Friday. The PCE, is the Fed’s preferred measure of inflation, and analysts said investors were in a wait-and-see posture after recent mixed data.

The latest updates on inflation could influence the Fed’s decision on when to begin reducing interest rates, which remain at their highest level in more than 20 years.

In Asian trading, another set of measures to boost the Chinese property market failed to lift market sentiment. Hong Kong’s Hang Seng shed 1.9% to 17,746.53, while the Shanghai composite index declined 0.5%.

The latest move was by Beijing when China’s capital cut minimum down-payment ratios and mortgage interest rates, beginning Thursday.

Other Chinese cities have taken similar measures in line with national policies aimed at enticing buyers back into a market that has languished since the government clamped down on excessive borrowing by property developers, causing dozens of such firms to default on their debts. The downturn has dragged on the entire economy, the world’s second largest.

In Tokyo, the Nikkei 225 index was 1% lower at 39,286.97 amid concern over further weakness in the Japanese yen.

The U.S. dollar was trading at 160.43 yen early Thursday, having hit the 160 level a day earlier. Japanese officials have cautioned they may intervene in the market to counter the trend, which has both positive and negative effects on the economy.

Elsewhere in Asia, Australia’s S&P/ASX 200 dropped 1% to 7,708.10, while shares also declined in Taiwan and India. Bangkok’s SET slid, while shares gained in Jakarta and Singapore.

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