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Asia markets slip with Japan leading losses; China exits deflation territory as consumer prices rise

·3 mins

Asia-Pacific Mixed as Wall Street Rally Takes a Breather

Asia-Pacific markets had a mixed start on Monday after a pause in Wall Street’s rally. Japan’s markets led losses with the Nikkei 225 plunging 2.18% and slipping below the 39,000 mark for the first time since Feb. 21. Japan averted a technical recession as revised official data showed the economy expanded 0.4% in the October-December period last year. China recorded its first month of inflation in four months with the country’s consumer price index climbing 0.7% year on year in February. Hong Kong’s Hang Seng index gained 1.53%, but Australia’s S&P/ASX 200 dropped 1.33%.

Japan Averts Technical Recession as Q4 2020 GDP Grows 0.4%

Japan posted a revised fourth-quarter GDP growth of 0.4% on an annualized basis, averting a technical recession. Earlier estimates had shown that Japan’s economy shrank 0.4% in the fourth quarter on an annualized basis, following a revised 3.3% slump in the third quarter, fulfilling the definition of a technical recession. A positive GDP reading could clear the way for the Bank of Japan to raise rates sooner rather than later.

China Records Inflation in February with 0.7% Increase in CPI

China’s consumer price index climbed 0.7% year-on-year in February, marking the first time in four months that the country’s inflation rate rose. This figure is a marked reversal from the 0.8% fall in January, which was China’s largest rate of deflation since September 2009. On a month-on-month basis, the CPI rose 1%, higher than expected. Meanwhile, the country’s producer price index slipped 2.7% year-on-year.

Fed Successfully Balances Dual Mandate as Jobs Data Shows Employment Growth Without Inflation

Friday’s jobs data illustrates that the Fed is achieving its so-called dual mandate of having high employment while keeping inflation tame. Labor is rolling, and wage inflation is rolling over, which shows the Fed is successfully managing its dual mandate.

Oil Prices Decline on Lackluster Chinese Demand and Ample Supply

Crude oil futures posted a weekly loss due to lackluster demand from China and the International Energy Agency’s view of a well-supplied market. The West Texas Intermediate contract for April fell 1.2% to settle at $78.01 a barrel on Friday, while the Brent contract for May dropped 1.1% to settle at $82.08 a barrel. Both U.S. crude and the global benchmark saw declines for the week.

Stocks Experience Movement in Midday Trading

Shares of Nvidia fell nearly 5%, Marvell Technology sank over 10%, and Costco slipped 7% during midday trading. Nvidia took a breather from its winning streak, Marvell Technology had disappointing first-quarter earnings and revenue guidance, and Costco reported lower-than-expected revenue for its fiscal second quarter.