Hang Seng futures fell 0.7%, and South Korea’s Kospi lost 0.62%. Japan’s benchmarks were split as the Nikkei 225 climbed 1.28%, while the broader Topix slipped 0.56%. Currencies barely moved, with the Japanese yen steady at 157.39 per dollar and the offshore yuan at 6.7086.
In India, the GIFT Nifty which indicates how the country’s stock market would open for the day, hinted towards a muted start in the red.
The hesitancy in Asia mirrored a turnaround in New York on Wednesday, September 30. All three major indices climbed after the inflation release, then gave back most of those gains. The Dow Jones Industrial Average fell 450 points, having opened higher and surged almost 600 points above that close at its peak.
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The S&P 500 retreated 70 points from its intraday high and ended 0.25% lower, capping its worst month since June. The Nasdaq fared better and finished 0.2% higher, although it also shed 250 points from its own peak.
US stock futures edged up in early trade, and Nasdaq 100 contracts gained 0.2% after Micron Technology delivered a solid outlook while warning that its profit margins would narrow.
The US Federal Reserve’s preferred gauge, the Personal Consumption Expenditure (PCE) index, rose 0.3% month-on-month in August, matching forecasts. Annual PCE inflation, however, came in at 3.4%, well below the 3.7% economists had projected. Core PCE, which strips out energy and food costs, rose 3% year-on-year, against expectations of 3.3%.
Those figures cut the likelihood of an interest rate rise at the Fed’s October meeting, and money markets now see less than a 40% chance of a hike. Short-dated Treasury yields hardly moved, while 30-year yields stayed near their highest since 2002.In Japan, a summary of opinions from the Bank of Japan’s September 17-18 meeting, released on Thursday, showed that policymakers now focus on stopping inflation from overshooting the 2% target. Governor Kazuo Ueda’s board had voted 7-2 to raise the policy rate to 1.25%, the highest since 1995. That move came just three months after the June increase, the shortest gap between hikes since 1990.
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One member said the bank had entered a new phase after 13 years of trying to lift price growth gradually. Others suggested the neutral rate could prove higher than estimated and that raising rates early was desirable.
On the crude front, Brent crude settled around $98 a barrel after spiking as high as $104 intraday on Wednesday. West Texas Intermediate for November delivery slipped 0.4% to $90.07, having risen 1.2% a day earlier.
Wall Street analysts and traders said crude flows from West Asia were nearing pre-war levels, although fuel supplies had lagged behind. JPMorgan Chase & Co analysts said in a September 29 note that the region’s oil exports were flowing again. They called the rebound remarkable for a region still at war, but added that it had been uneven.