Asian stocks mixed after US, China CPI surprise; Nikkei extends rally
Investing.com-- Most Asian stocks moved in a tight range on Friday as investors digested mixed inflation readings from the U.S. and China, while Japan’s Nikkei 225 index continued to blaze past its global peers.
Regional stocks took a weak overnight lead-in from Wall Street, as data showed U.S. consumer price index (CPI) inflation grew slightly more than expected in December, dampening hopes that the Federal Reserve will begin trimming interest rates early this year.
But traders still appeared to be maintaining bets on a March rate cut, at least according to the CME Fedwatch tool. This notion limited major losses in U.S. and Asian stock markets, with traders still holding out for an eventual reduction in U.S. rates this year.
Japan’s Nikkei 225 was the best performer in Asia this week, rising 1.2% on Friday to a new 34-year high at nearly 35,500 points. Expectations of an ultra-dovish Bank of Japan were a key driver of the Nikkei’s rally, especially as markets awaited more stimulus measures in Japan following a devastating earthquake.
Signs of weakness in the Japanese economy also persisted, as data on Friday showed the country’s current account shrinking more than expected in November. This data was preceded by soft inflation and wage growth readings earlier in the week.
The Nikkei was set for a 6.2% jump this week- its best weekly gain since March 2022. The TOPIX index, which covers a broader range of Japanese stocks, rose 0.3% on Friday and was set to add 4.1% this week. The index was also at its highest level since 1990.
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