Japan's Core Inflation Reaches Highest Level in Over 40 Years, Impacting Asian Markets

Asian-Pacific shares traded lower on Wednesday, following losses on Wall Street. Investors are awaiting the release of some key economic data from the region.

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Core consumer prices in Japan rose at a faster pace in November, reaching the highest level in nearly four decades. The Nikkei 225 stock index fell slightly, while the Japanese yen remained strong against the US dollar. Hong Kong's Hang Seng index fell in its final hour of trade as investors digest China's longer-than-expected reopening path. The Shanghai Composite fell and the Shenzhen Component also lost ground.

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Australia's S&P/ASX 200 index closed down 0.252% at 7,107.7, while South Korea's Kospi index also fell 1.83% to 2,313.69.
Taiwan Semiconductor Manufacturing Co. is in talks with suppliers to build its first European chip plant, according to the Financial Times. The newspaper cites people familiar with the matter who say the plant would be located in Dresden, Germany. The company is reportedly sending senior executives to Germany to discuss government support levels and local supply chain. The plant is expected to focus on 22nm and 29nm chip technologies, according to the report.

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Shares of the firm listed in Taiwan traded lower on Friday, down 2.8%.
Taiwan Semiconductor Manufacturing Co. is in talks with suppliers to build its first European chip plant, according to the Financial Times. The newspaper cites people familiar with the matter who say the plant would be located in Dresden, Germany.
The company is reportedly sending senior executives to Germany to discuss government support levels and local supply chain. The plant is expected to focus on 22nm and 29nm chip technologies, according to the report.

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Shares of the firm listed in Taiwan traded lower on Friday, down 2.8%. U.S. Secretary of State Antony Blinken spoke with his Chinese counterpart Wang Yi and discussed Russia’s war on Ukraine, the situation on Covid, and U.S.-China bilateral relations. U.S. Spokesperson Ned Price said in a statement that the Secretary discussed the need to maintain open lines of communication and responsibly manage the U.S.-PRC relationship.

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"It is essential to keep communication channels open," Blinken said in a tweet.
The Chinese foreign ministry released a readout of a meeting between the two countries, during which they discussed issues around Taiwan.
Singapore's core inflation rate rose 5.1% in November on an annualized basis, unchanged from October's figure.

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The reading was higher than estimates in a Reuters poll forecasting a 5% increase, driven by moderate increases in the services and electricity costs, according to the Ministry of Trade and Industry. This is good news for the economy, as it indicates that inflation is under control. The Ministry of Finance has said that inflation is expected to stay elevated in the first half of 2023, before slowing more discernibly. This means that prices for goods and services are likely to continue to rise during this period.

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In Malaysia, the core CPI for November remained unchanged at 4% compared to a year ago, beating expectations of 3.9%. This is a positive sign for the Malaysian economy, as it indicates that inflationary pressures are under control. At its October monetary policy meeting, the Bank of Japan hinted at an upcoming policy shift, according to minutes from the meeting. This suggests that the bank is considering changing its current monetary policy in the near future.

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One member of the committee noted that it was important to continue to examine how future exit strategies would affect the market and whether market participants would be well prepared for them. While members of the central bank's policy board highlighted the need to maintain its long-held dovish stance, they also noted the need for "paying attention to the side effects of monetary easing," according to the minutes.

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It was necessary to examine the impact of high prices on household behavior and wages, the statement said.
According to Bloomberg, China is planning to scrap quarantine requirements for overseas travelers next month. The report cites sources familiar with the matter.
According to a recent report, international arrivals into mainland China will only need to complete three days of health monitoring. The exact details of this monitoring have yet to be formally defined.

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These would be the guidelines to follow if you were placed in a quarantine hotel or isolation facility. As of now, travelers are obliged to quarantine themselves for five days in a hotel or isolation facility, followed by three days of home isolation. Oil prices rose on expectations that Russian oil exports could fall by 20% in December, according to a report by Reuters. The report said that the drop in exports was due to lower production levels in Russia.

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Brent crude futures rose 0.72% to $81.56 a barrel on Wednesday, while U.S. marker West Texas Intermediate futures traded up 1.01% at $78.27 a barrel. The rise in Brent crude futures was driven by a weaker dollar and concerns about a possible supply disruption in the Middle East. The rise in West Texas Intermediate futures was driven by a weaker dollar and concerns about a possible supply disruption in the Middle East.

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A drop in Russian crude exports is expected to add pressure to a rise in demand for heating oil as the U.S. prepares for a winter storm.
Japan's core consumer price index rose 3.7% in November on an annualized basis, the fastest pace since December 1981. The reading was in line with estimates from analysts, and comes after a strong showing last month. This indicates that the economy is still on track, despite some recent turbulence.

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The reading on inflation remains above the Bank of Japan's target of 2%. Nationwide CPI for all items stood at 3.8%.
According to tech fund manager Jeremy Gleeson, automation and cost-cutting at many businesses during a recession will drive up profits at two Silicon Valley companies.

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Gleeson, who manages a $1.5 billion tech fund at AXA, believes that if there is a recession next year, companies will need to be more efficient with their resources.
He said that one of the ways companies could improve productivity is by using technology more effectively. He named two stocks that will benefit from this trend.
Stocks closed lower on Thursday, after pulling back from session lows. Year-end selling resumed on Wall Street, dragging down stock prices.
The Dow Jones Industrial Average fell 348.99 points, or 1.05%, after falling as much as 803.05 points earlier in the session. The S&P 500 declined 1.45%, while the Nasdaq Composite was 2.18% lower.

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High-growth tech stocks are unlikely to rebound after a change in interest rates from the Federal Reserve, according to one market strategist. This strategist believes that the recent change in rates will not be enough to boost the stock market.