TOKYO- Inflation fears pressured Asian stocks and buoyed the dollar on Thursday after data overnight showed US consumer prices surged at the fastest pace since 1990 last month, boosting the case for faster Federal Reserve policy tightening.
Nominal US Treasury yields shot higher, with that on the benchmark 10-year note leaping by the most since February, while real yields, which take inflation into account, dipped to record lows.
Gold jumped to a five-month high and bitcoin hit a record as investors sought inflation hedges.
Oil pulled back sharply from near seven-year highs after US President Joe Biden said his administration was looking for ways to reduce energy costs.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.85 percent, led by a 1.19 percent slide in Australia’s benchmark.
Chinese blue chips slipped 0.09 percent.
Japan’s Nikkei bucked the trend by rising 0.24 percent, supported by the yen’s weakness against a resurgent dollar and as US stock futures ticked up slightly.
Overnight though, the S&P 500 tumbled 0.82 percent, its worst day in more than a month.
That marked the first back-to-back declines in a month, after the index closed at a record peak to start the week.
The dollar index, which gauges the currency against six major peers including the yen and euro, hovered just below the high reached on Wednesday of 94.905, a level not seen since July of last year.
The greenback added 0.13 percent to 114.04 yen, up from as low as 112.73 at the start of the week.
The US consumer price index surged 6.2 percent on an annual basis, with gasoline leading a broad-based increase that added to signs that inflation could stay uncomfortably high well into 2022 amid snarled global supply chains.
Inflationary pressures are also brewing in the labor market, with other data on Wednesday showing the number of Americans filing claims for unemployment benefits fell to a 20-month low. – Reuters