Japan's economy grew for an eighth-straight quarter in October-December, its best run since the late 1980s, but the reading was below expectations
Hong Kong (AFP) - Tokyo led most Asian markets lower on Wednesday, extending the previous day’s losses while nervous investors await the release of key US inflation data later in the day fearing a renewal of recent volatility.
While Hong Kong and Seoul clocked up healthy gains following a positive lead from Wall Street, uncertainty continues across trading floors after the pain of last week.
Tokyo, which ended Tuesday at a four-month low, fell again with investors unimpressed by data showing Japan’s economy grew at a weaker-than-expected rate in the last quarter of 2017 and slowed from the previous three months.
The Nikkei ended the morning 0.6 percent down, with a stronger yen hitting exporters and dealers brushing off the fact the economy had enjoyed an eight-quarter run of gains, its longest period of growth since the late 1980s.
On other markets, Shanghai fell 0.3 percent, Sydney lost 0.4 percent and Singapore was off 0.1 percent. Wellington and Manila also skidded.
However, Hong Kong added 0.6 percent to extend Tuesday’s more than one percent rise while Seoul was up 0.7 percent.
But the focus is on the release of US inflation, which could inflame or defuse anxiety about the Federal Reserve’s timetable for lifting interest rates.
Rising US Treasury yields, consumer prices and wages, combined with a strong run-up in equities in recent months, have combined to spark this month’s retreat – wiping trillions off global equities as the era of cheap borrowing comes to an end.
“It certainly feels like the proverbial calm before the storm and rightly so as there plenty of reasons to be cautious,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
However, he pointed out that US investors had pushed Wall Street higher for three straight days “despite the fresh memories of last week’s market carnage in the wake of an inflationary uptick in wage growth”.
On currency markets, the greenback edged up slightly against the euro having fallen almost one percent Tuesday, but it retreated against the pound and most high-yielding currencies including the Australian dollar, South Korean won and Indonesian rupiah.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 0.6 percent at 21,109.29 (break)
Hong Kong - Hang Seng: UP 0.6 percent at 30,022.05
Shanghai - Composite: DOWN 0.3 percent at 3,176.76
Euro/dollar: DOWN at $1.2382 from $1.2400 at 2130 GMT
Pound/dollar: UP at $1.3913 from $1.3890
Dollar/yen: DOWN at 107.48 from 107.83 yen
Oil - West Texas Intermediate: DOWN eight cents at $59.11 per barrel
Oil - Brent North Sea: UP two cents at $62.74 per barrel
New York - DOW: UP 0.2 percent at 24,640.45 (close)
London - FTSE 100: DOWN 0.1 percent at 7,168.01 (close)