Traders in Asia are cautious ahead of US inflation, and Tokyo has reached a 31-year high.


Traders in Asia are cautious ahead of US inflation, and Tokyo has reached a 31-year high.

Early Asian trade Tuesday saw investors tread gingerly as they awaited US inflation data that might help determine when the Federal Reserve begins to wind down its market-supporting monetary policy.

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Experts are also watching China, where authorities have strengthened their grip over the tech sector as part of a broader regulatory crackdown on private businesses.

The main event this week is the release of US consumer price data on Tuesday, which comes just days after numbers revealed that the costs firms pay at the factory gate rose at a record pace last month due to a surge in demand as well as supply and labor shortages.

The Fed is under pressure to start unwinding its ultra-loose monetary policy as soon as November, according to the article.

The consumer price index is expected to rise above 5%, with economists warning that a figure much higher than that could push the central bank’s hand in order to keep inflation from spiraling out of control.

For the time being, traders will remain on the sidelines, according to Edward Moya of OANDA.

In a commentary, he noted, “Investors don’t want to build huge holdings before the inflation data because the risks are to the upside as Covid inflation continues to impair supply chains.”

“If inflation is higher than forecast, the taper deadline could be pushed back from December to November.”

Concerns over struggling property colossus Evergrande, which is teetering on the verge of bankruptcy owing hundreds of billions of dollars, led to losses in Hong Kong and Shanghai.

The company warned on Tuesday that it is under “extreme pressure” as it battles with a liquidity constraint that many fear may push it into bankruptcy and have a negative influence on the Chinese economy.

Evergrande’s Hong Kong-listed shares tumbled over 12%, and the company’s stock has lost nearly 80% of its value since the beginning of the year.

Wellington, Taipei, Manila, and Bangkok were among the cities that suffered losses.

Tokyo, on the other hand, concluded at its highest level since 1990, on optimism that a new prime minister will provide additional impetus to Japan’s ailing economy.

Sydney, Singapore, Seoul, Mumbai, and Jakarta all saw their stock prices rise. In morning trade, London, Frankfurt, and Paris all declined.

Fears of another coronavirus outbreak in China, which has resulted in scores of positive cases, have also shattered confidence. Brief News from Washington Newsday.


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