Asia markets fall after hot U.S. inflation report; first estimates from Japan's wage negotiations expected

Asia-Pacific markets declined on Friday due to stronger-than-expected growth in producer prices in the US for February. The headline producer prices climbed at a rate of 0.6% last month, surpassing the consensus estimate of 0.3%. Core PPI, which excludes food and energy prices, rose by 0.3%. Investors in the region kept an eye out for updates on Japan’s spring wage negotiations. The Nikkei 225 fell by 0.4%, while the Topix edged 0.3% higher. South Korea’s Kospi dropped almost 1%, and the smaller-cap Kosdaq fell by 0.9%. The People’s Bank of China was also in focus amid expectations of no change to its one-year medium-term lending facility rate. The S&P/ASX 200 in Australia hit its lowest point in about three weeks, declining by 1.55%. In the US, all major indexes ended lower as the inflation report drove bond yields higher. The 10-year Treasury yield rose by 10 basis points to 4.29%. The Dow slipped 0.35%, the Nasdaq Composite fell 0.3%, and the S&P 500 slipped 0.29%.

Crude Oil Futures Rise on IEA Forecast

Crude oil futures gained on Thursday, continuing the previous session’s upward trend, following the International Energy Agency’s forecast of a supply deficit for 2024. The West Texas Intermediate contract for April closed at $81.26 a barrel, up 1.93%, while the Brent contract for May reached $85.30 a barrel, up 1.51%. The IEA anticipates a slight supply deficit for the year due to OPEC+’s commitment to production cuts.

JPMorgan & Chase Slips After Federal Reserve Fines the Bank

JPMorgan & Chase saw a decline of over 1% after being fined almost $350 million by the US Federal Reserve. The central bank imposed the fines on JPMorgan for inadequate analysis of firm and client trading for misconduct. Despite the decline, JPMorgan’s shares have risen by more than 11% this year.

Strong Producer Price Growth Reported in February

Producer prices in February rose by 0.6%, with core PPI increasing by 0.3%. Economists had predicted a 0.3% increase for the headline number and a 0.2% increase for core PPI. This is the final significant data release before the Federal Reserve’s meeting on March 19-20.