Asia-Pacific markets mixed as China's inflation marks slowest pace in year

Malaysia's central bank held its overnight policy rate steady at 2.75%, making no changes to its benchmark rate for three consecutive sessions. The decision was in line with expectations of economists polled by Reuters.

Bank Negara Malaysia said in Thursday's statement, "Headline and core inflation are expected to moderate over the course of 2023."

Malaysia's consumer price index rose 3.7% on an annualized basis in January.

The central bank added that the economy is likely to see slow but continued growth this year.

"Growth will remain driven by domestic demand. Household spending will be underpinned by sustained improvements in employment and income prospects," it said.

"Tourist arrivals are expected to continue rising, further lifting tourism-related activities," Malaysia's central bank said.

The Malaysian Ringgit slightly strengthened to 4.5200 against the U.S. dollar.

— Jihye Lee

China's consumer price index fell below expectations in February, but this cannot be seen as support for a weaker picture in domestic recovery, Citi economists said in a note.

"We don't see it as solid evidence of weak domestic consumption. The soft CPI print could be a compounded result of the [post-Chinese New Year] seasonality, deep pork downcycle and fading of the initial reopening impulses," Chief China economist Xiangrong Yu wrote.

"There could be downside risks with the earlier-released weak imports data to domestic demand, but we would have a fuller assessment with the activities data due next Wednesday," he said.

Yu pointed to the increase in rent prices and domestic mobility data that suggest China's economic recovery is "in shape."

"We don't feel too complacent about inflation despite one month of soft reading," Yu wrote. "With an eye on inflation, the central bank could switch to a wait-and-see mode once the economy is back on track and prepare for policy normalization."

— Jihye Lee

The U.S. equity market is flashing warning signs, according to chief market strategist Chris Watling.

Watling, also the chief executive of London-based Longview Economics, expects stocks to fall into a bear market thanks to lofty valuations driven higher since September last year.

CNBC Pro subscribers can read more about when Watlin expects markets to decline here.

— Ganesh Rao

China's consumer price index for February came in at 1% year on year, coming off from an annual increase of 2.1% in January.

The figure is lower than Reuters' forecast of a 1.9% increase. Prices of food, alcohol and tobacco increased by 2.1% year on year.

China's producer price index for February declined 1.4% compared to a year ago, deepening a contraction of 0.8% in January.

— Lee Ying Shan

Japan's lower house of parliament approved nominee Kazuo Ueda to be the next governor of the Bank of Japan, Reuters reported.

The upper house will vote on Friday on Ueda's nomination, the report added.

Approval is seen as a formality given Prime Minister Fumio Kishida's Liberal Democratic Party holds a majority number of seats in both houses.

Current Bank of Japan governor Haruhiko Kuroda's term ends on April 8.

— Jihye Lee

Bank of Japan is unlikely to make any changes to its monetary policy in the upcoming meeting, according to a Reuters poll.

The central is expected to maintain its ultra-dovish stance and hold its benchmark interest rate at -0.1% during the two-day meeting which would mark governor Haruhiko Kuroda's final one before his term ends in April.

Goldman Sachs cited three key drivers to Kuroda making no changes: The meeting's proximity to the end of the fiscal year, wage negotiations underway, and "Kuroda's long-held view that premature rate hikes have delayed Japan's exit from deflation."

Goldman analysts wrote "Some sliver of heed should still be taken," adding that they think "caution should be warranted in case Governor Kuroda takes responsibility for cleaning up his legacy Yield Curve Control policy."

Kazuo Ueda is nominated to become the next BOJ governor.

— Lee Ying Shan

Japan's GDP grew slower at 0.1% on an annualized for the October-December quarter, bogged down by weak private consumption according to official data.

The reading is weaker compared with preliminary estimates of a 0.6% growth, and also comes in lower than a 0.8% expansion. according to analysts polled by Reuters.

Private consumption, which accounts for around 57% of Japan's GDP, inched up by only 0.3%, lower than forecasts of a 0.5% growth.

—Lee Ying Shan

Japan's Nikkei 225 gained almost 1% in early hours of Thursday's trade — on pace for the fifth straight day of gains for the first time since Jan 12th.

Week-to-date, the index is up over 2.7% and is on pace for the best week since Jan 27, when Nikkei gained 3.12%.

— Gina Francolla

The European and U.S. are crafting a trade agreement on critical minerals in a move to reduce their reliance on China, Wall Street Journal reported, citing sources familiar with the matter.

Both parties are laying out the foundations of what would be a focus on environmental and labor standards for obtaining nickel and lithium, the sources were quoted saying.

The move would mark a step towards the Critical-Minerals Pact between the U.S., Japan and UK, which aimed to shift energy transition supply chains away from China.

Negotiations on the terms of the deal will be tabled during the White House meeting on Friday.

—Lee Ying Shan

Higher bond yields are usually bad news for stock investors. But that's not the case for these stocks, given their innovative business models, strategist Amy Kong says.

"We continue to be constructive on stocks relative to bonds and cash but recognize risks have escalated," Kong, who is chief investment officer at CI Barrett Private Wealth, told CNBC's "Street Signs Asia" on Wednesday.

Pro subscribers can read more here.

— Zavier Ong

Major cryptocurrencies bitcoin and ether sank in early Asia trade after the central lender to the crypto industry, Silvergate Capital, said it will shutdown its operations.

"In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward," the company said in a statement. Bankrupt crypto exchange FTX was a major Silvergate customer.

Bitcoin was down 2.31% to trade at $21,711.8 while Ether fell 2.15% to $1,532.98 according to CoinDesk data.

— Lee Ying Shan

Markets are jittery now that fears that interest rates will stay higher for longer have been reignited.

Stocks tumbled on Tuesday and the 2-year Treasury yield jumped to its highest level since 2007 as Federal Reserve Chair Jerome Powell suggested that rates may need to go higher for longer.

How should investors trade in such an uncertain market? Here's what BlackRock and other pros say.

CNBC Pro subscribers can read more here.

— Weizhen Tan

China's consumer price index is expected to have slowed in February to 1.9%, economists surveyed by Reuters show.

This would follow an annualized inflation print of 2.1% seen in January and 1.8% seen in December.

A lower print would somewhat ease investors' worries that the rise of prices in China from a reopened economy would have a spillover effect to global markets, causing central banks around the world to continue hiking rates further.

On a monthly basis, inflation is expected to inch 0.2% higher from January. China's producer price index is forecast to rather decline 1.3% year-on-year, falling further from January's drop of 0.8%.

 — Jihye Lee

The Dow dipped 58.06 points on Wednesday, or 0.18%, to end at 32,798.40, while the S&P 500 edged 0.14% higher to settle at 3,992.01. The Nasdaq Composite rose 0.4% to finish at 11,576.00.

— Samantha Subin

Federal Reserve Chairman Jerome Powell said Wednesday that he hasn't made up his mind about what the central bank will do regarding interest rates when it meets later in March.

Speaking to the House Financial Services Committee, Powell said he and his colleagues will be assessing a raft of incoming inflation data, including reports next week on consumer and producer prices.

"They're going to be important in our assessment of the higher readings that we very recently have received and the overall direction of the economy and of our progress in bringing inflation down," the Fed leader said.

"We have not made any decision about the March meeting," he added. "We're not going to do that until we see additional data. The larger point, though, is we are not on a preset path and we will be guided by the incoming data and the evolving outlook."

Powell shook markets Wednesday when he said he anticipates that if the inflation data remain hot, he expects rates will go higher than expected and at a faster pace. Markets now expect the Fed to raise its benchmark borrowing rate by 0.5 percentage point when the Federal Open Market Committee meets March 21-22.

— Jeff Cox

Job openings fell in January but remained elevated and still outnumber available workers by a nearly 2 to 1 margin, the Labor Department reported Thursday.

Available positions totaled 10.824 million for the month, a decline of about 410,000 but still above the FactSet estimate for 10.58 million.

The numbers indicate a historically tight labor market in which open jobs outnumber those considered unemployed by a 1.9 to 1 margin, according to January data from the Bureau of Labor Statistics.

— Jeff Cox