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Asia markets largely fall as U.S. inflation stokes higher-for-longer rate worries; China CPI slows

Lim Hui Jie

This is CNBC's live blog covering Asia-Pacific markets.

Customers at a fresh food market in Shanghai, China, on Monday, Aug. 7, 2023.
Bloomberg | Bloomberg | Getty Images

Asia-Pacific markets largely fell after U.S. inflation for March came in hotter than expected, stoking worries that the Federal Reserve could keep interest rates higher for longer.

U.S. consumer price index climbed 3.5% on a year-on-year basis and 0.4% compared with the previous month. Economists surveyed by Dow Jones had expected a 0.3% month-on-month gain and 3.4% year-over-year rise.

Excluding volatile food and energy components, the core CPI also accelerated 0.4% on a monthly basis while rising 3.8% from a year earlier, compared with respective estimates for 0.3% and 3.7%.

China's consumer inflation slowed to 0.1% in March from 0.7% in February. Economists polled by Reuters expected the consumer price index to climb 0.4% in March.

The producer price index recorded a 2.8% fall year on year, in line with expectations.

Hong Kong's Hang Seng index pared some losses, and was last down 0.25%, while the CSI 300 index in mainland China ended marginally lower at 3,504.24

South Korean markets resumed trade after a public holiday, with the Kospi reversing earlier losses to close nearly flat at 2,706.96. The small-cap Kosdaq shed 0.14% to finish at 858.1.

South Korea's liberal opposition parties scored a landslide victory in a parliamentary election held on Wednesday, likely handicapping incumbent president Yoon Suk Yeol and his conservative party's efforts to push through their legislative agenda.

Japan's Nikkei 225 fell 0.35% to 39,442.63, but the broad-based Topix reversed losses and gained 0.15%, closing at 2,746,96.

In Australia, the S&P/ASX 200 slipped 0.44% to 7,813.6, snapping a three-day winning streak.


Overnight in the U.S., all three major indexes plunged as the 10-year Treasury yield spiked, with the Dow Jones Industrial Average leading losses and tumbling 1.09%.

The S&P 500 dropped 0.95%, with ten of the 11 S&P 500 sectors finishing the session in negative territory, while the Nasdaq Composite sank 0.84%.

The rate on the 10-year Treasury note topped 4.5%, while the 2-year Treasury yields surged close to 5%.

— CNBC's Sarah Min and Sophie Kiderlin contributed to this report.

Fast Retailing posts 27.7% jump in attributable profit for fiscal first half, raises full-year profit guidance

Uniqlo owner Fast Retailing posted a 27.7% rise in attributable profit for its fiscal first half ending February, coming in at 195.9 billion yen ($1.27 billion).

Operating profit came in at 257 billion yen, a 16.7% rise year on year, while revenue increased 9% to 1.6 trillion yen.

Fast Retailing lowered its full-year revenue guidance to 3.03 trillion yen from 3.05 trillion yen, but raised its attributable profit forecast to 320 billion yen.

— Lim Hui Jie

PBOC surprises with yuan midpoint rate setting as stronger dollar pressures currency

The People's Bank of China has set the midpoint fixing rate for the yuan at 7.0968 per U.S. dollar, 1,654 basis points stronger compared to a Reuters estimate.

This is the biggest discrepancy since Reuters started its estimations in 2018.

At 1:10 p.m. Shanghai time, the offshore yuan was trading at 7.2530, after China reported a lower-than-expected inflation rate for March, highlighting continued weakness in the world's second-largest economy.

— Lim Hui Jie

Foxconn considering to rotate chief executives to nurture talent: Reuters

Chairman of Foxconn Young Liu delivers a speech during the Hon Hai Tech Day in Taipei on Oct. 18, 2023.
I-hwa Cheng | AFP | Getty Images

Apple supplier Foxconn is considering implementing a rotational chief executive system to nurture future talent, according to a Reuters report.

Citing people familiar with the matter, Reuters said "the plan was a response to repeated calls by investors to boost corporate governance by separating the role of chief executive from the chairperson."

Young Liu has held both the current chairman and CEO roles since 2019 in the 50-year-old Taiwanese company. Liu took over from founder Terry Gou, who held both roles until his retirement in 2019.

— Reuters

China's inflation misses estimates as price growth slows to 0.1% in March

Citizens are shopping at a supermarket in Nanjing, East China's Jiangsu province, on March 9, 2024. 
Costfoto | Nurphoto | Getty Images

China's consumer price index rose just 0.1% year on year in March, down from a 0.7% rise in February and lower than the 0.4% expected by economists polled by Reuters.

On a month-on-month basis, the country's CPI slid 1%, sharply lower than the 0.5% fall expected by Reuters.

Separately, China's producer price index slid 2.8% in March compared with the same period last year, in line with expectations.

Lim Hui Jie

Philippine exports climb at fastest rate since October 2022

Exports from the Philippines climbed at their fastest rate since October 2022, posting a 15.7% gain in February from a year ago.

Imports climbed 6.3% year on year, reversing from a revised 6.1% drop in January. As a result, the country's trade deficit shrank to $3.65 billion from $4.22 billion.

Total trade in February for the Philippines came in at $15.46 billion, 9.7% higher compared to the same period of the previous year.

— Lim Hui Jie

Yen weakens past 153 against the U.S. dollar before paring losses

The Japanese yen continued its slide against the U.S. dollar late Wednesday, crossing the 153 mark and hitting a high of 153.17.

At that level, this was the weakest the yen has been against the greenback since 1990. The currency later recovered to trade around 152.8

Early Thursday, Japan's top currency diplomat Masato Kanda said that recent yen moves were "rapid," and that authorities would not rule out any steps to deal with excessive exchange-rate swings, according to a Reuters report.

— Lim Hui Jie

CNBC Pro: Citi says this 'high risk' but 'attractive' global stock has 280% upside

Citi has identified a digital advertising and marketing services company as a high-risk but potentially attractive investment opportunity.

The investment bank's analysts highlighted that, while the short-term outlook remains cloudy, "there is potentially still a lot to stay excited about medium term."

The Wall Street bank expects the 'attractive' yet 'high risk' stock could go up by 280% over the next 12 months.

CNBC Pro subscribers can read more here.

— Ganesh Rao

CNBC Pro: Beyond the U.S.: Investment analyst names markets - and stocks - he is betting on right now

Attractive returns and the breadth of opportunities have historically been among the many reasons why the U.S. has reigned supreme among investors.

While the global superpower still has "some areas that look good" in terms of value, investment analyst Steven Glass at Pella Funds Management has his sights on opportunities in other geographies.

"There are still areas that look good value, but generally, it's outside of the U.S.," Glass, who is managing director at the investment house said, naming markets - and stocks - he is betting on right now.

CNBC Pro subscribers can read more here.

— Amala Balakrishner

Dollar rises to highest level against the yen since mid-1990

Igor Golovniov | Lightrocket | Getty Images

The U.S. Dollar rose broadly Wednesday following March's hotter than expected inflation reading, sending the dollar to its highest level against the Japanese yen since mid-1990.

The dollar index, which measures the greenback's value against six major currencies, was up 1.1% at 105.22. Against the yen, the dollar was last 0.7% higher at 152.895 yen, having touched 152.95, the highest point since mid-1990.

— Hakyung Kim, Reuters

Here's what CIOs and markets strategists have to say about the CPI report:

A hotter-than-expected print on the consumer price index for March has led several investors to take a more bearish stance on the Federal Reserve's rate-cutting timeline. Results from companies' first-quarter earnings will be a key indication about the market's direction after its strong rally over the past year, some investors and strategists said.

Take a look at what some of them had to say:

  • Seema Shah, chief global strategist at Principal Asset Management: "Today's crucial CPI print has likely sealed the fate for the June FOMC meeting with a cut now very unlikely...even if inflation were to cool next month to a more comfortable reading, there is likely sufficient caution within the Fed now to mean that a July cut may also be a stretch, by which point the U.S. election will begin to intrude with Fed decision making."
  • John Lynch, chief investment officer for Comerica Wealth Management: "Equity indexes are increasingly dependent on the upcoming earnings season, as companies must deliver to substantiate higher valuations. Any profit disappointment likely brings the possibility of a near-term correction in the 5-6% range for the S&P 500 Index."
  • Sonu Varghese, global macro strategist at Carson Group: "This pushes out the timing of the first rate cut because labor markets and the economy are strong, and now there's less urgency to cut."
  • Rick Rieder, BlackRock's chief investment officer of global fixed income: "The world has clearly shifted to services, and particularly experiential, consumption...You can see that same dynamic in the amazing prices people are willing to pay to be at events, and/or together with other people, and consequently, we see in today's data services inflation remaining sticky," he said. "A key factor to understand here, is that many of these areas are not very interest rate sensitive, and thus the Fed has a very hard task in bringing down these price levels through the blunt tool of policy rates...it's probable that cuts will be pushed off until late in the year, or beyond."

— Pia Singh

CPI rises more than expected in March

A key U.S. inflation metric came in hotter than expected, raising concern that the Federal Reserve may not cut interest rates this year.

The consumer price index rose 0.4% in March from the prior month. Year over year, it gained 3.5%. Economists polled by Dow Jones expected a 0.3% gain month over month and a 3.4% increase year on year.

The March CPI increase was a reacceleration from February, when it gained 3.2%.

Core CPI, which strips out volatile food and energy prices, also rose more than expected last month.

— Fred Imbert