Asian shares meander as US inflation test awaits; kiwi slides
Federal Reserve's easing cycle, while the New Zealand dollar fell sharply after the central bank softened its hawkish stance on rates.
New Zealand's central bank held the cash rate steady at 5.5% on Wednesday, reiterating that previous rate hikes had helped dampen prices, but adding that the risk of further rate hikes had been reduced. The kiwi was last at $0.61235, down 0.75% on the day.
«The RBNZ has closed the door to further rate hikes, which was a surprise to somewhat hawkish expectations,» said Charu Chanana, head of currency strategy at Saxo.
«This may give room for NZD longs to unwind in the short term, but NZD still provides a strong carry in this low volatility environment.»
The yen remained bolted to psychologically key 150 per dollar level and was last at 150.43 per dollar. The Nikkei was 0.2% lower on the day, having touched fresh record peaks this week.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.11% lower at 527.14 points but hovering around a near seven-month peak of 531.56.
China stocks were mixed in early trading, with Hong Kong' Hang Seng index down 0.31% and China's blue-chip index CSI300 up 0.46%.
Investor focus is squarely on the personal consumption expenditures price index (PCE) for January, the Fed's preferred inflation measure, due on Thursday. The PCE is expected to have risen 0.3% on a monthly basis in January, up slightly from the 0.2% increase seen in December, a Reuters poll showed.
A slew of strong economic data along with inflation that has proven to be
