By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Thursday morning over signs that U.S. inflation is moderating and concerns over an earlier-than-expected asset tapering by the U.S. Federal Reserve receded.
Japan’s Nikkei 225 was up 0.21% by 10:09 PM ET (2:09 AM GMT). South Korea’s KOSPI inched up 0.04%, with the country reporting a record 2,200 daily COVID-19 cases, health minister Deok-Cheol Kwon said on Wednesday.
In Australia, the ASX 200 inched up 0.01% while Hong Kong’s Hang Seng Index was down 0.33%.
China’s Shanghai Composite edged up 0.11% while the Shenzhen Component was down 0.41%. Fears that the insurance technology platforms will be the latest to face tightened regulations grew after China’s Banking and Insurance Regulatory Commission stepped up scrutiny of the sector. The People’s Bank of China also faced calls to cut interest rates as the country’s latest COVID-19 outbreak threatens the economic recovery.
Benchmark 10-year U.S. Treasuries pared gains after a strong auction and the latest U.S. inflation data. The core consumer price index (CPI) rose a lower-than-expected 0.3% month-on-month in July.
However, Fed officials offered differing views on the data’s implications for the central bank’s asset tapering timeline. Kansas City Fed President Esther George called for a move back towards pre-COVID-19 norms as the labor market is expected to continue its gains.
Atlanta Fed President Raphael Bostic was more cautious, saying that the Fed’s commitment to maximum employment means that interest rates will not be raised too quickly and that inflationary pressures seem to be temporary.
Some investors suggested that more data was needed to know whether inflationary pressure is beginning to recede.
“There is a lot being read into the month over month numbers, but one month does not make a trend,” Robertson Stephens Wealth Management chief economist Jeanette Garretty told Bloomberg, referring to the data.
“It is a little too early to say that this is conclusive evidence that we can see some of the heat on prices coming off. Some of the heat is off but not all of the heat is off.”