Asia-Pacific Shares Mixed; China PPI Higher than Expected, Japan’s Nikkei Weighed Down by US CPI Worries

The major Asia-Pacific stock indexes finished mixed but mostly lower on Wednesday, as investors assessed the impact of Chinese inflation data, while awaiting the release of Thursday’s U.S. consumer inflation report and the European Central Bank’s monetary policy decision.

Hong Kong shares ended lower after the U.S. passed a bill that poses a threat to Chinese technology. South Korean stocks finished nearly 1% lower on a technology slump and Japanese shares were pressured by cautious trading ahead of the U.S. inflation data.

Australian shares were dragged down by bank shares, and Chinese stocks rose as factory-gate data signaled a strong recovery.

Cash Market Performance

In the cash market on Wednesday, Hong Kong’s Hang Seng Index settled at 28742.63, down 38.75 or -0.13%. The South Korean KOSPI finished at 3216.18, down 31.65 or -0.97% and Japan’s Nikkei 225 Index closed at 28860.80, down 102.76 or -0.35%.

Australia’s S&P/ASX 200 Index settled at 7270.20, down 22.40 or -0.31% and in China, the benchmark Shanghai Index finished at 3591.40, up 11.29 or +0.32%.

China Shares End Higher as Factory-Gate Data Signals Recovery

China stocks ended higher on Wednesday, driven by coal and resources firms, as investors lapped up data that showed factory-gate prices in May saw their fastest annual pace in more than 12 years, implying signs of steady global economic recovery.

China’s producer price index for May jumped 9% from a year earlier, against expectations in a Reuters poll for a 8.5% increase. The country’s consumer price index in May rose 1.3% from a year earlier, lower than an expected 1.6% rise in a Reuters poll.

Hong Kong Shares End Lower as U.S. Bill on China Tech Threat Weighs

Hong Kong shares closed lower on Wednesday, dragged by tech firms after U.S. Senator passed a package of laws aimed at boosting its ability to take on Chinese technology.

The U.S. Senate voted 68-32 on Tuesday to approve a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology.

The Chinese foreign ministry on Wednesday urged the United States to stop promoting such laws and to stop depicting China as a threat.

Japan Shares End Lower on Caution Ahead of US Inflation Data

Japanese equities closed lower on Wednesday, on profit-taking in shippers and semiconductor stocks, with investors awaiting U.S. inflation data as it could influence how soon the Federal Reserve pares its stimulus program.

Financial firms and insurers declined after a retreat in long-term U.S. Treasury yields dampened the outlook for returns on their portfolios.

Eisai Co, however, surged 16.26%, rising by the daily limit for a second straight session after its Alzheimer’s drug received a nod from U.S. regulators on Monday.

“Japanese investors want to see the U.S. CPI number tomorrow, and if it’s not faster than expected, that should come as a relief to markets and could very well result in a rally,” said Masahiro Ichikawa, chief strategist at Sumitomo Mitsui DS Asset Management.

Right now though, “there’s a strong wait-and-see attitude overall in markets,” he said, adding that investors booked profits and squared positions ahead of the data.