Asian stocks steady before CPI data; Japanese shares slide on BOJ jitters
Investing.com-- Most Asian stocks kept to a tight range on Tuesday as markets remained cautious before key U.S. inflation data, while Japanese stocks saw extended losses amid more signs that the Bank of Japan will raise interest rates soon.
Regional stocks also largely tracked a middling overnight session on Wall Street, as a recent risk-on rally appeared to be running out of steam, while uncertainty over the path of interest rates also factored into market caution.
Japanese stocks were the worst performers in Asia on Tuesday, with the Nikkei 225 and TOPIX indexes falling 1.3% and 1.6%, respectively. Both indexes hit over two-week lows, and were now trading well below record highs hit last week.
Mildly stronger-than-expected producer price index inflation, released on Tuesday, fueled increasing bets that sticky inflation and strength in wages will see the BOJ end its yield curve control and negative interest rates policy in the near-term.
The reading came just a day after several media reports suggested that the BOJ was considering a mid-March or late-April exit from its ultra-dovish policy.
Focus this week is also on wage negotiations between Japanese companies and major labor unions, with any large increases in wages likely to elicit a hawkish response from the BOJ.
Uncertainty over the BOJ kept sentiment towards Asian markets muted, as did persistent doubts over a Chinese economic recovery.
China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell slightly on Tuesday, but remained within sight of near four-month highs hit on Monday.
But gains in Chinese markets had slowed in recent sessions, amid persistent doubts over an economic recovery in the country. Beijing had set a largely underwhelming growth
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