Asian Shares Mixed After China Trade Data; Nikkei Tumbles Amid Volatile Yen

Asian stocks ended mixed on Friday as investors reacted to surprisingly soft U.S. inflation data, mixed Chinese trade figures and comments from several Federal Reserve officials on the interest rate trajectory.

The dollar edged up slightly as the latest inflation data fueled bets for a September rate cut and a Pew Research Centre poll showed former President Trump leading President Biden by 4 points among registered voters.

Gold edged lower but was headed for a third straight week of gains. Oil extended gains amid signs of easing inflationary pressures in the United States, the world’s biggest oil consumer.

China’s Shanghai Composite Index ended a choppy session marginally higher after the release of mixed trade data.

Chinese exports rose 8.6 percent year-on-year by value in June, while imports dropped 2.3 percent, customs data revealed.

Hong Kong’s Hang Seng Index surged 2.6 percent to 18,293.38 after China unveiled fresh curbs on short selling.

Ahead of next week’s Third Plenum meeting, there was speculation that Chinese policymakers may announce a tax revamp to plug gaps in local government funding.

Japanese stocks tumbled as the yen held gains on speculation that authorities may have again intervene in forex markets to prop up the ailing currency.

The Nikkei 225 Index plunged 2.5 percent to 41,190.68, while the broader Topix Index settled 1.2 percent lower at 2,894.56.

Chip-making equipment giant Tokyo Electron plummeted 6.2 percent and smaller peer Disco lost 8.8 percent after the Philadelphia Semiconductor Index fell more than 3 percent overnight.

Seoul stocks fell sharply, with the Kospi closing down 1.2 percent at 2,857.

Australian markets rose notably to hit record highs as banks surged on speculation that a Fed rate cut would impact the Reserve Bank of Australia’s stance on interest rates. The big four banks rose 1-2 percent.

The benchmark S&P/ASX 200 Index hit a record high of 7,969.10 before closing at 7,959.30, up 0.9 percent from its previous close. The broader All Ordinaries Index climbed 0.9 percent to 8,206.10.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.6 percent to 12,134.97 despite weak manufacturing data.

U.S. stocks declined overnight even as data showed consumer prices surprisingly fell in June from the previous month, bolstering hopes for two Federal Reserve rate cuts this year.

Treasury yields dropped as data showed the CPI declined 0.1 percent in June, the weakest monthly reading since May 2020 and putting the 12-month rate at 3 percent, down from 3.3 percent in May.

The annual rate of core consumer price growth also slowed to 3.3 percent from 3.4 percent.

The tech-heavy Nasdaq Composite plunged 2 percent and the S&P 500 shed 0.9 percent after reaching new record intraday highs in early trading. The narrower Dow ended little changed with a positive bias.

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