Before the US CPI, Stocks Sank, While the Yen Rose – Asia Market Wrap

As traders awaited US inflation data for hints on the direction of Fed policy, European markets were set to follow quiet Asian movements. The value of the Yen increased.

While contracts for US stocks saw minimal movement, the Euro Stoxx 50 futures increased by 0.2%. With shares in Japan and Hong Kong fluctuating, the MSCI Asia Pacific Index was up 0.1%, wiping up the majority of its earlier gain. Following a 0.4% decline in the previous session, the Dollar gauge stabilised.

The US consumer pricing report arrives at a critical time for global markets, following a string of strong economic data that lowered Fed rate cut expectations and caused a debt selloff. Forecasters predict the monthly report to reflect a fifth month of steady gains, with the core consumer price index climbing 0.3% in December.

The Yen rose 0.4% versus the Dollar after Governor Ueda said the BoJ will deliberate on a likely rate hike at its meeting next week, adding that he had received promising opinions on wages from various companies.

Elsewhere in Asia, the PBOC injected a near-historic quantity of short-term cash into the banking system on Wednesday, providing liquidity support amid a cash shortage as the new year approaches. China’s short-term interbank lending rates fell.