Mumbai, 11 Mar (Commoditiescontrol): Asian stocks markets struggled on Monday while the dollar looked vulnerable ahead of a reading on U.S. inflation that could hasten, or delay, the start of global rate cuts.
The yen edged higher as Reuters reported a growing number of Bank of Japan policymakers are warming to the idea of ending negative rates this month on expectations of hefty pay hikes in this year's annual wage negotiations.
Data released on Monday showed Japan was not, in fact, in recession after economic growth was revised up to an annualised 0.4% for the December quarter.
Tuesday's U.S. consumer price index (CPI) report for February is forecast to rise 0.4% for the month and keep the annual pace steady at 3.1%. Core inflation is seen rising 0.3%, which will nudge the annual pace down to the lowest since early 2021 at 3.7%.
The slower core would complement the softer conditions seen in the February payrolls report, where unemployment hit a two-year high of 3.9%, and would keep the Federal Reserve on track to cut rates in the next few months.
Futures imply about a 30% chance of a Fed cut in May and 70% for a first move in June.
Chinese price data out over the weekend showed a welcome bounce in inflation to 0.7% in February, though producer prices remained mired in deflation.
Beijing also promised to improve home sales in a "forceful" and "orderly" way to support the country's beleaguered residential property market, but was short on details.
Hopes for lower borrowing costs have been a fillip for equities with MSCI's broadest index of Asia-Pacific shares outside Japan easing 0.1%, after hitting an eight-month peak on Friday.
Japan's Nikkei retreated 2.3%, having scored a succession of all-time highs last week. Chinese blue chips added 0.2%, but without much conviction.
S&P 500 futures and Nasdaq futures were a fraction lower, having both run into profit taking on Friday as artificial intelligence diva Nvidia shed 5.6%. .N EUROSTOXX 50 futures fell 0.4%, and FTSE futures dipped 0.2%.
Treasury bonds continued their rally after the benign jobs report with 10-year yields touching a one-month low of 4.038% and last trading at 4.060%.
The drop in yields has undermined the dollar, especially against the yen given market speculation that the BOJ will end its negative rate policy (NIRP) and yield curve control (YCC) this month.
The dollar was off at 146.82 yen , having shed 2% last week to a five-week low of 146.48. FRX/ The euro was holding firm at $1.0939 , after bouncing 0.9% last week to as high as $1.0980.
The decline in the dollar and bond yields has been supportive of non-yielding gold which was up at $2,180 an ounce , having surged 4.5% last week to record peaks.
Oil prices have had a tougher time as worries about China's demand offset supply cuts by producer group OPEC+. Brent dipped 54 cents to $81.54 a barrel, while U.S. crude lost 57 cents to $77.44 per barrel.
(By Commoditiescontrol Bureau: 09820130172)
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