Asian Stock Market: Bears keep reins amid inflation anxiety

Asia-Pacific equities hold lower ground as reflation fears woo investors despite holidays at many bourses. Challenges to easy money also join the geopolitical fears from the Middle East and downbeat US Treasury yields to weigh on the market sentiment.

Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan drops 0.80% while Japan’s Nikkei 225 marks over 2.0% intraday losses ahead of Thursday’s European session. Mixed data from Japan, the coronavirus (COVID-19) worries and comments from the Bank of Japan (BOJ) Governor Haruhiko Kuroda offered triple whamming for the Asian major’s markets.

It should, however, be noted that New Zealand’s NZX 50 turns out to be the region’s biggest loser, down 2.83% by the press time, as Prime Minister (PM) Jacinda Ardern cites border concerns over virus resurgence abroad. Also notable is the Taiwan market as it drops 0.80%, after a more than 8.0% slump to test March lows, amid regulatory moves.

Elsewhere, markets in China are mildly offered and so do from Australia as reflation spill across the board. Further, South Korea was also on the negative performers’ list with a 1.10% downside by the press time. Though, markets in India and Indonesia are closed due to Eid.

On a broader front, the US Treasury yield retreat after the US CPI-led heaviest run-up in two months whereas S&P 500 Futures print mild gains. It’s worth mentioning that the US Consumer Price Index (CPI) jumped to the 2008 high on an annual basis the previous day, for April, while fueling concerns over the US Federal Reserve’s (Fed) easy money policies, also challenging President Joe Biden’s future stimulus.

Given the lack of major data/events, US Weekly Jobless Claims and Producer Price Index (PPI) are waited for fresh impulse ahead of the key US Retail Sales and Michigan Consumer Sentiment Index, up for publishing tomorrow.