HONG KONG- Asian shares were pinned at two-year lows on Thursday after white-hot US inflation data drove fears the Federal Reserve will raise interest rates even more aggressively, which boosted the safe haven dollar.
Underscoring how inflation pressures are also hitting Asia, both the Monetary Authority of Singapore and the BangkoSentral ng Pilipinas surprised markets by tightening monetary policy on Thursday in off cycle moves.
MSCI’s broadest index of Asia-Pacific shares outside Japan was flat by early afternoon.
EUROSTOXX 50 futures gained 0.4 percent and S&P 500 futures reversed early losses to trade 0.1 percent lower.
Chinese blue chips rose 0.5 percent a day after data showed China’s June exports rose at the fastest pace in five months as factories revved up after the lifting of COVID lockdowns.
China will release June activity data on Friday along with second quarter GDP.
“With the prospect of the Chinese economy exiting its darkest period in Q2 into a more stable second half, and with the prospect of monetary support versus tightening in the rest of the world, Chinese stocks seem attractive in relative terms compared to other asset classes and global equities,” said Carlos Casanova, senior economist for Asia at UBP.
Nonetheless, in a sign China is not yet out of the woods, reports that a growing number of homebuyers are threatening to stop making mortgage payments caused Chinese banking and property names to fall.
Japan’s Nikkei rose 0.7 percent, as the yen’s weakness against the dollar boosted exporters, and good jobs figures helped Australian stocks to gain 0.43 percent. — Reuters
