SYDNEY- Asian shares were a touch below a recent three-month top on Thursday with China a tad weaker as investors weighed inflation concerns ahead of key US economic data while oil prices rose to near 1-1/2 year highs.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent to 711 points.
It went as high as 712.57 on Wednesday, a level not seen since early March.
Japan’s Nikkei added 0.4 percent. Australian shares climbed to all-time highs as investors cheered stronger-than-expected economic growth data released on Wednesday.
Chinese shares were marginally softer.
While broader stock markets remain close to record highs, the momentum seen earlier in the year has ebbed as investors begin to worry a stronger-than-expected rebound from COVID-19 means higher inflation and sooner-than-expected monetary policy tightening.
A weekly unemployment report and May private payrolls data on Thursday will be followed by monthly jobs numbers on Friday, with investors looking for signs of an economic rebound and rising inflation.
Adding to inflation fears, oil prices hit the highest level in 1-1/2 years led by a decision by major producing nations to restore supply only gradually while the slow pace of nuclear talks between the United States and Iran also helped.
The US Federal Reserve published its “Beige Book” report, which pointed to labor shortages and inflation pressures.
Investment managers too are becoming increasingly worried with BlackRock Founder Larry Fink the latest to warn that the market was underestimating the risk of higher inflation.
Philadelphia Fed Bank President Patrick Harker also restated his call that “it may be time to at least think about tapering our $120 billion in monthly Treasury bond and mortgage-backed securities purchases.”
The Fed has already announced it would begin unwinding the corporate bond holdings it acquired last year to calm credit markets at the height of the pandemic. – Reuters
