Asia report: Markets rise as US consumer inflation slows

(Sharecast News) - Asia-Pacific markets generally rose on Thursday, driven by stronger-than-expected GDP growth in Japan, though China's economic indicators presented a mixed picture. Investors were also reacting to fresh consumer inflation data out of the US overnight, with prices rising at their slowest rate since early 2021, as expected.

"Asian stock indexes perked up on Thursday, riding the wave of new economic data from China and Japan," said SPI Asset Management managing partner Stephen Innes.

"In China, retail sales in July pleasantly surprised to the upside, though industrial production didn't quite hit the mark.

"Over in Japan, second-quarter GDP outpaced expectations with a robust 0.5% quarter-over-quarter climb, translating to a 3.1% annual surge."

Innes quipped that the yen "didn't blink", adding that the "soft landing whispers" from the US continued to serenade global risk markets.

"Enter the new market oracle - while the latest US consumer price index print flashes a green light for the Fed to initiate rate cuts, possibly in September, the real debate is whether it'll be a bold 50 basis point dive, or a more cautious 25 basis point trim.

"The outcome hinges on the upcoming August payroll fireworks.

"Will it rebound with a robust 160,000 to 200,000 job gain, brushing off July's jitters, or will a modest sub-100,000 reading push the Fed towards a heftier cut?"

Most markets rise after US inflation data

Japan's Nikkei 225 gained 0.78%, closing at 36,726.64, while the Topix index increased by 0.73% to 2,600.75.

Positive performances from major Japanese companies like Dentsu, Kawasaki Heavy Industries, and M3, which saw gains of 9.82%, 7.36%, and 6.95% respectively, contributed to the uplift.

In China, the Shanghai Composite advanced by 0.94% to 2,877.36, and the Shenzhen Component rose 0.71% to 8,370.12.

Notable gains were seen in Tianjin Realty Development Group, Xinjiang Youhao Group, and Tibet Tianlu, which surged by over 10% each.

Hong Kong's Hang Seng Index, however, inched down by 0.03% to 17,109.14, with declines in Zhongsheng Group, Alibaba Health Information Technology, and Li Ning Co, which dropped by 4.46%, 3.67%, and 3.65%, respectively.

South Korea's markets were closed for the National Liberation Day holiday.

In Australia, the S&P/ASX 200 edged up by 0.19% to 7,865.50, supported by strong performances from NRW Holdings, Magellan Financial Group, and Meridian Energy.

New Zealand's S&P/NZX 50 increased by 1.1% to 12,710.57, driven by gains in Stride Property, Skellerup, and Fletcher Building.

In currency markets, the dollar was last up 0.03% on the yen, trading at JPY 147.38.

The greenback meanwhile weakened against its antipodean counterparts, falling 0.3% on the Aussie to AUD 1.5109, and retreating 0.04% from the Kiwi to change hands at NZD 1.6665.

Oil prices rose, with Brent crude futures last up 0.6% on ICE to $80.24 per barrel, and the NYMEX quote for West Texas Intermediate increasing 0.65% to $77.48.

Japan's economy shows resilience, retail sales outperform in China

On the data front, Japan's economy showed surprising resilience in the second quarter, with gross domestic product increasing 0.8% from the prior quarter, surpassing the 0.5% growth forecast by economists.

That marked a recovery from the revised 0.6% decline seen in the first quarter.

However, on a year-on-year basis, Japan's GDP contracted for the second consecutive quarter, falling by 0.8%, a slight improvement from the previous quarter's 0.9% decrease.

In China, retail sales rose by 2.7% year-on-year, outperforming the 2.6% growth anticipated by analysts.

Conversely, industrial output grew by 5.1%, falling short of the expected 5.2%.

Additionally, the urban unemployment rate increased to 5.2%, up from 5% in June.

Australia's unemployment rate for July edged up to 4.2%, a 0.1 percentage point increase.

However, the participation rate improved to 67.1%, exceeding the anticipated 66.9%.

Overnight in the United States, the Bureau of Labor Statistics reported that consumer prices rose by 2.9% year-on-year, marking a decrease from June's 3% and the lowest rate since March 2021.

Month-on-month, prices inched up by 0.2%, aligning with Dow Jones' forecast of a 0.2% increase and a 3% rise year-over-year.

Reporting by Josh White for Sharecast.com.