TSX gains after CPI shows US inflation rose 3%
Investing.com-- Asian stock markets fell on Wednesday after two days of sharp gains, as weakness in technology stocks weighed, while investors assessed Japan’s latest trade data and first policy signals from new Prime Minister Sanae Takaichi’s government.
The pullback followed a subdued session on Wall Street, where the NASDAQ Composite edged lower with losses in major technology names. The S&P 500 ended nearly flat, while the Dow Jones Industrial Average gained on the back of upbeat corporate earnings.
U.S. stock index futures were largely unchanged as of 02:55 GMT.
Japan trade data, PM Takaichi policy signals in focus
Japan’s trade figures released on Wednesday showed that exports rose for the first time in five months, but fell short of market forecasts. Imports climbed sharply above expectations, resulting in an unexpected trade deficit of 234.6 billion yen ($1.54 billion).
"Today’s trade data was overall positive for growth. The weakness of US exports was more than offset by strong demand from the rest of the world," ING analysts said in a note.
"We cautiously expect the gradual normalisation of exports to the US in the near term," they added.
Political developments in Tokyo also drew market attention after Sanae Takaichi was formally sworn in as Japan’s first female prime minister on Tuesday.
Her 19-member cabinet includes Finance Minister Satsuki Katayama and Foreign Minister Toshimitsu Motegi, while Shinjiro Koizumi was appointed as defense minister.
Takaichi has pledged to revive “Abenomics-style” policies centered on fiscal stimulus and economic security, but investors are cautious about the government’s ability to balance growth initiatives with Japan’s heavy public debt load.
"She will have to confront a variety of challenges, such as addressing inflationary pressures, managing regional geopolitical tensions, and navigating ongoing domestic political instability," ING analysts said.
Japan’s Nikkei 225 fell 0.5% to 49,066.75 points on Wednesday after jumping to a record high of 49,945.5 points in the previous session. The broader TOPIX index traded slightly higher.
US-China tensions persist; India reportedly nears trade deal
Elsewhere, U.S.-China trade tensions persisted after U.S. President Donald Trump said he expected his upcoming meeting with Chinese President Xi Jinping to yield a “good deal,” but added the talks might not happen.
His remarks reignited concerns over renewed tariff threats and broader strategic frictions between the world’s two largest economies.
China’s blue chip Shanghai Shenzhen CSI 300 edged 0.2% lower, while the Shanghai Composite index also ticked down.
Hong Kong’s Hang Seng index fell 0.5%, with the Hang Seng TECH sub-index dropping 0.8%.
Investors were also cautious ahead of the U.S. consumer price index data due on Friday, which could provide clues on the Federal Reserve’s move next week.
Australian S&P/ASX 200 fell 0.9%, while Singapore’s Straits Times Index was largely unchanged.
Bucking the regional trend, South Korea’s KOSPI rose 0.4%, remaining below record highs reached in the previous session.
Futures for India’s Nifty 50 gained 0.2% before market open. The Mint newspaper reported on Wednesday that India and the U.S. are close to finalizing a long-pending trade agreement that could slash tariffs on Indian exports to around 15-16% from the current 50%.