Asian Shares Generally Lower as Traders Digest Japan’s June Inflation Data

Asian stocks were generally lower on Friday as investors digested Japan’s June consumer price index data, while US markets weighed tech earnings reports.

At 9:36 a.m. Bangkok time, the Nikkei 225 dropped 0.36% after official data revealed that the country’s core inflation rate, which excludes expenses of fresh food, came in at 3.3%, matching the estimates of economists polled by Reuters.

This is above the Bank of Japan’s 2% target and up from May’s 3.2% reading. 

South Korea’s Kospi fell 0.18% as producer prices dropped for the first time since November 2020.

Australia’s S&P/ASX 200 slid 0.34% lower.

Meanwhile, Hong Kong’s Hang Seng index gained 1.14%, and the Shanghai Composite in mainland China added 0.49%.

The Dow Jones Industrial Average rose for a ninth consecutive day as a result of Johnson & Johnson’s better-than-expected earnings reports. The Dow has its longest winning streak of consecutive days since 2017.

Despite this, the overall market declined when trader favorites Netflix and Tesla posted earnings drops. The Nasdaq Composite fell 2.05% while the S&P 500 lost 0.68%.

The markets are anticipating next week’s meetings between the Federal Reserve, the European Central Bank, and the Bank of Japan to make policy decisions and discuss the future of interest rates.

The unexpected decline in U.S. weekly jobless claims bolstered expectations for a strong payrolls report, after markets bet that the Federal Reserve will be largely done tightening after its July rate increase.

The probability of a second rate hike from the Fed by November was bumped up to 33%, and the scale of expected rate reduction for next year was reduced by less than 100 basis points.