Asian Stocks Up Ahead of U.S. Inflation Data By

© Reuters.

By Gina Lee – Asia Pacific stocks were up Thursday morning as investors await U.S. inflation data to be released later in the day to get hints of the possibility of tapering asset purchases.

The benchmark fell below 1.5% for the first time in a month.

China’s was up 0.30% by 10:02 PM ET (2:02 AM GMT) while the rose 0.41%. U.S.-China tensions are on investors’ radar. U.S. president Joe Biden on Wednesday to revoke Trump-era bans on TikTok and WeChat. Instead, the US Department of Commerce will now review apps with ties to foreign adversaries that may pose a security risk to American data privacy or national security.

Meanwhile, data released on Wednesday said the Chinese consumer price index (CPI) for May contracted 0.2% and grew 1.3% , missing forecasts. However, the producer price index (PPI) exceeded expectations, growing 9% year on year.

Japan’s was up 0.45%, with the data in April to be released later in the day.

Hong Kong’s was up 0.35% and South Korea’s rose 0.34%.

In Australia, the rose 0.41% after the country released the data earlier in the day.

On the data front, investors now await data, including the U.S. data for May and , due later in the day to get further clues on the direction of the U.S. monetary policy.

“A significant upside surprise in inflation could tilt the U.S. Federal Reserve taper discussion to sooner rather than later, though the majority would still be looking for substantial progress toward maximum employment before considering tapering,” ANZ economists wrote in a note.

So far though, “the market is buying into the Fed’s view that the rise in prices is transitory and the Fed will not alter its policy guidance at next week’s FOMC meeting,” they added.

Some investors are reportedly less concerned about the upcoming U.S. print and the possibility that the Fed will start talking about tapering asset purchases later in the week.

“Even if inflation comes out a little higher than Street expectations tomorrow, the Fed isn’t going to change its path,” Esty Dwek, head of global market strategy at Natixis Investment Managers, told Bloomberg. “There’s a lot of wait-and-see going on and really just thinking it would take a lot to really surprise markets.”

Across the Atlantic, investors are focusing on the due to be handed down later in the day. The U.K. is to host the Group of Seven (G7) leaders’ summit in Cornwall, due on Friday, which plans to share 1 billion Covid-19 vaccine doses in 2022 to help cover 80% of the world’s adult population.

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