Asian Shares End On Muted Note Ahead Of US Inflation Data

Asian stocks ended on a muted note Friday as investors awaited the release of Fed’s preferred inflation gauge later in the day that could offer signal into when U.S. rate cuts can be expected in 2024.

The dollar hovered near a four-month low and bond yields ticked lower after two-year U.S. Treasury yields fell 2 bps overnight when third-quarter U.S. core PCE inflation was revised down to 2 percent.

Gold climbed to its highest level in nearly three weeks as markets priced in more than 150 bps of rate cuts in 2024.

Oil was set for another weekly gain as concerns about the security of Red Sea shipping outweighed doubts surrounding OPEC’s efforts to limit global supply.

Chinese shares edged lower as internet stocks tumbled after regulators announced a wide range of rules aimed at curbing spending and rewards that encourage video games.

The benchmark Shanghai Composite index slipped 0.13 percent to 2,914.78 while Hong Kong’s Hang Seng index fell 1.69 percent to 16,340.41.

Netease shares slumped nearly 25 percent and Tencent Holdings lost 12.5 percent.

Japanese shares ended on a flat note, with banks and shipping stocks gaining. Toyota Motor shed 0.9 percent after an announcement that it would recall 1.12 million Toyota and Lexus vehicles because of a potential faulty sensor.

The Nikkei average finished marginally higher at 33,169.05 while the broader Topix index closed 0.45 percent higher at 2,336.43.

Official data revealed earlier in the day that Japan’s headline inflation rate slowed to 2.8 percent year-on-year in November from 3.3 percent in the previous month. It was the slowest pace of inflation since July 2022.

Seoul stocks ended on a flat note, with the Kospi average closing little changed with a negative bias at 2,599.51 after late-day selling. Battery and bio-related stocks led losses.

Australian markets also ended on a flat note but posted their fourth straight weekly gain. Financials declines, offsetting gains in the mining and energy sectors.

Core Lithium…