Asian Stocks Fall, Yen Extends Gain Against Dollar: Markets Wrap

(Bloomberg) — Shares in Asia fell Monday as investors look ahead to US inflation data due Tuesday that is expected to show a further slowing in core prices.

Most Read from Bloomberg

Equities in Australia, South Korea and Japan all declined. The Topix index of Japanese equities faced its biggest one-day drop since October, weighed down by the tech sector which lost almost 3%. The tech-heavy Nikkei 225 index also fell with other Asian chip and AI-related stocks after Nvidia Corp. slipped 5.6% Friday.

Hong Kong equity futures went against the broader trend to trade higher, helped along by the first rise in consumer prices since August. The 0.7% increase in February CPI exceeded consensus estimates and is welcome news for investors worried about deflation in the world’s second largest economy.

Economic growth in Japan expanded in the fourth-quarter, supporting expectations that the Bank of Japan will raise interest rates for the first time since 2007 as soon as this month. Declines for Japanese shares partly reflected the stronger yen, which typically acts as a headwind for the country’s equities.

The currency was firmer against the greenback in early trading Monday, extending its 2% rally last week against the US currency — its best weekly gain since July. Japanese bond yields gained on a report stating that the BOJ is considering scrapping its yield curve control program.

“Perhaps, Japan is finally coming out of this deflationary vortex and that could have profound implications on Japanese assets,” said Paresh Upadhyaya, director of fixed income and currency strategy at Amundi Asset Management, explaining that this will be supportive for the yen through repatriation flows, mainly going into stocks.

Story continues

Tuesday’s US consumer price index figures will dominate the economic data reports this week. The core prices gauge is seen rising 0.3% in February from a month earlier, and 3.7% on a year-over-year basis — which would be the smallest annual rise…