Nikkei rides high while traders wait on US inflation
By Tom Westbrook
SINGAPORE (Reuters) — Japanese stocks hit a near 34-year high on Wednesday while other Asian equities meandered close to one-month lows and bond markets traded cautiously ahead of U.S. inflation data due this week.
Japan's Nikkei — which had its best year for a decade in 2023 — climbed 1% in early trade to break above 34,000 for the first time since 1990.
Exporters led the charge, helped by a softening yen. The broader Topix also hit its highest since 1990. (T)
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5% to its lowest since mid-December.
Overnight, U.S. stocks slipped modestly, as had Treasury prices, while the dollar nudged higher. Bitcoin spiked after an unauthorised post from the U.S. Securities and Exchange Commission's X account said it had approved bitcoin exchange-traded funds. [.N][US/][FRX/]
U.S. equity futures were steady in the Asian morning and, after Australian inflation came slightly cooler than expected, focus was on U.S. consumer price data due on Thursday.
Interest rate futures are pricing around 140 basis points of U.S. rate cuts this year, compared to the Federal Reserve's dot plot of 75 bps. The probability of a move as early as March has been pared somewhat to a still-high 64%, and will likely shift again depending on Thursday's report.
«Markets are starting to come to the expectation that rate cuts in the U.S. may be some way off. Guidance from members of the Federal Reserve Monetary Committee tend to favour cuts in the second half of the year,» ANZ analysts said in a note.
Forecasts are for core CPI to rise 0.3% in December, pulling annual inflation down to 3.8% and its lowest since mid-2021.
Geopolitical tensions were also on the radar as disruptions in
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