Asia shares shaky, traders on guard as Japanese inflation tops forecast
Asian shares struggled to advance on Tuesday, with slightly warmer-than-expected Japanese inflation putting investors on guard ahead of price data due in Europe and the U.S. this week.
The yen steadied at 150.57 to the dollar and inched off a three-month low on the euro as Japanese inflation stayed at the central bank's 2% year-on-year target, keeping alive expectations it would exit negative rates by April.
Tokyo's Nikkei crept 0.4% higher to eke a fresh record high. MSCI's broadest index of Asia-Pacific shares outside Japan was flat, keeping beneath last week's seven-month peak. [.T]
Wall Street indexes fell overnight and S&P 500 and Nasdaq futures nudged 0.1% lower in morning trade. [.N]
The Federal Reserve's favoured measure of inflation — the core personal consumption expenditures (PCE) price index — is due on Thursday and forecasts are for a rise of 0.4%.
«If as expected, the core m/m reading would be the highest since last February and fit with the patience message from the Fed,» said analysts at ANZ Bank.
Rate jitters and enormous auctions — $127 billion on Tuesday and another $42 billion on Wednesday — left Treasuries under pressure, though yields steadied in the Asia morning. [US/]
Ten-year U.S. Treasury yields were last 2 basis points lower at 4.27%. Two-year yields fell four basis points to 4.70%.
Markets have already pushed out the likely timing of a first Federal Reserve easing from May to June, which is currently priced at around a 70% probability. Futures imply a little more than three
