MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed at 566.55, moving away from the two year high of 573.38 it hit last week
Asian stocks faltered in choppy early trade on Wednesday as markets braced for a key U.S. inflation number, while the yen stayed just short of 160 per dollar level, keeping traders on alert for another round of intervention by Japanese authorities.
Risk sentiment was also capped as hawkish comments from Fed officials kept near-term U.S. rate cut expectations in check in a boost to the dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed at 566.55 in choppy trading, moving away from the two year high of 573.38 it hit last week. The index is still up 3.5% in June, on course for fifth consecutive month of gains.
Japan’s Nikkei and Taiwan stocks surged, led by chipmakers, tracking the rally in tech heavy Nasdaq on Tuesday, with Nvidia soaring more than 6%, snapping out of a three-session decline that had wiped out nearly $430 billion from its market value.
China stocks, however, inched down with blue-chip CSI300 Index and the Shanghai Composite Index both 0.2% lower and headed for decline of around 4% for the month.
Hong Kong’s Hang Seng index was also down 0.16%.
On the U.S. monetary policy front, Fed officials urged patience on interest rate reductions, with governor Lisa Cook saying the central bank is on track for a rate cut if the economy’s performance meets her expectations. But Cook refused to say when the Federal Reserve will be able to act.
U.S. Federal Reserve Governor Michelle Bowman reiterated her view that holding the policy rate steady “for some time” will probably be enough to bring inflation under control.
The comments along with data showing a steady housing market kept expectations in check over when and by how much the Federal Reserve will reduce rates. Markets are pricing in 47 bps of easing this year, with a rate cut in September pegged at 66% probability, according to the CME FedWatch tool.
