Asian stocks were mixed on Friday following a subdued Chinese inflation report and as traders kept a close eye on developments in eastern Ukraine.
Chinese consumer price inflation rose an annual 1.8 percent in April, coming in below estimates for a 2 percent gain and March's 2.4 percent rise. Meanwhile, producer prices fell for the 26th straight month, dropping an annual 2 percent, worse than forecasts for a 1.8 percent decline.
"The continued downside surprise in CPI inflation suggests room for further policy easing. We maintain our view that the PBOC [People's Bank of China] will likely ensure sufficient liquidity in the second quarter. We think interest rate cuts are likely if growth disappoints further in Q2, and that RRR cuts are likely but would require a further worsening in economic conditions," said Jian Chang, China economist at Barclays Capital.
Pro-Russian separatists in the Donetsk region of Ukraine said their referendum to secede will go ahead as planned on Sunday, despite being urged to hold off by President Vladimir Putin. More street clashes are expected on Friday as Ukraine celebrates 'Victory Day.'
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