Asian Stocks Drop as US Inflation Holds Steady

Asian stocks hit a one-month low and ended the week with losses as the US dollar gained ground, propelled by stable US inflation data. The absence of surprises in the US Consumer Price Index (CPI), which maintained a 0.2% increase from the previous month, failed to buoy market sentiment. The value of the Japanese yen reached its lowest point in six weeks compared to the dollar, influenced by yield control measures in Japan and subdued trading due to a public holiday.

While some initial positivity was seen in benchmark 10-year Treasuries, the yield ultimately closed higher by 7 basis points at 4.11% in New York. The US dollar’s foreign exchange performance remained volatile following the inflation data, while European gas prices experienced fluctuations amid concerns of potential disruptions in production of LNG in Australia.

Amid the uncertainty, experts maintain varying outlooks. While market participants hoped for more dovish statements from Fed speakers post the inflation report, such sentiment did not materialize. Nevertheless, some analysts believe that the current market conditions could present opportunities, particularly for Japanese investors attracted by yields exceeding 4%.