Asia markets mixed as investors digest U.S. consumer prices; China’s inflation eases

Treasury Secretary Janet Yellen said the idea of ​​US lawmakers allowing the country to default on its debts should be “inconceivable.”

Yellen told reporters ahead of the G7 finance ministers and central bank governors meeting in Niigata, Japan, that former President Donald Trump had suggested to Republican lawmakers that they allow the country to default on its debts. said he knew.

“America must never default,” she said. “I think that anything that would seriously undermine the U.S. and global economy should be viewed as unthinkable by everyone.”

When asked what steps the Biden administration could take after defaulting on its debt, Yellen stressed that lawmakers must raise the debt ceiling.

“There are no good alternatives that will save us from catastrophe. ,” she told reporters.

– Lee Ji Hye

Australia’s Trade Minister Don Farrell is due to arrive in Beijing to discuss the removal of China’s trade barriers to certain Australian exports. The Sydney Morning Herald reported.

According to reports, Farrell will also discuss detained Australians Chen Lei and Yang Hengjun, who were formally arrested in 2021 on suspicion of illegally providing state secrets abroad.

Australia has expressed concern for Australians detained in China.

The report added that Farrell aims to push for freedom and trade restrictions for Cheng and Yang ahead of a possible visit to Beijing by Australian Prime Minister Anthony Albanese later this year.

– Lee Ji Hye

New Zealand food inflation rose 12.5% ​​year-on-year in April, the biggest rise since September 1987, StatsNZ said in a release on Thursday.

Food prices rose 14%, fruit and vegetable prices rose 22.5%, and meat, poultry and fish prices rose 9.5%.

Compared to March, food prices rose by 0.5%, driven by restaurant meals and ready-to-eat meals.

In the afternoon in Asian markets, the New Zealand dollar gained 0.9% against the US dollar to 0.6370.

– Lee Ji Hye

The Japanese yen edged up to 134.14 against the US dollar as the dollar index remained low after the US consumer price index showed inflation eased overnight.

The dollar index fell slightly to 101.48 in the morning in Asian markets. China’s onshore yuan fell slightly against the dollar to 6.9389 after consumer and producer prices showed weaker than expected values.

The Korean won fell 0.24 percent against the dollar to 1,320.95 won. The Australian dollar fell 0.1% against the US dollar to $0.6671.

China’s consumer price index rose 0.1% year-on-year in April, its lowest level since early 2021. On a month-on-month basis, prices fell by 0.1%.

Economists polled by Reuters had expected consumer prices to rise 0.4% from a year earlier and remain flat month-on-month.

The April data came after China’s inflation rate fell to 0.7% in March after hitting a recent peak of 2.8% in September.

The Chinese yuan fell 0.04 percent against the US dollar to 6.9428.

Consulting firm Capvision Partners revealed Wednesday that CEO Xu Rujie will chair a three-member internal “compliance committee.”

It follows state media reports earlier this week about a state investigation into Capvision’s operations in the world’s second-largest economy.

Shanghai-based Capvision said in a statement, “We are deeply aware of our failure to fully comply with our national security responsibilities in our past business activities, which poses a grave danger to the country’s national security. “We are deeply aware that there are significant hidden dangers and loopholes.” According to a CNBC translation.

— Clement Tan

The Philippines’ gross domestic product grew 6.4% year-on-year in the first quarter, beating the 6.1% forecast of economists polled by Reuters.

This number marked the lowest growth in eight quarters. The economy grew 1.1% quarter-on-quarter, also beating expectations of 0.9%.

The main drivers of growth in the first quarter were wholesale and retail and auto repair, according to the country’s statistics authority.

— Lim Huisier

The Bank of Japan stressed at its April meeting that the central bank should maintain its current ultra-dovish monetary policy and watch out for wage hikes at its 2% inflation target.

In a summary of the opinions expressed At its meeting on April 27, the Bank of Japan indicated that it was on track to achieve its 2% inflation target, but said, “For the time being, it is appropriate to continue monetary easing.”

Wages are expected to rise more than expected in negotiations this year, and signs of a “virtuous cycle” between wages and prices are beginning to appear in the Japanese economy, the Bank of Japan said.

However, he said the BOJ needs to “firmly support the momentum of wage increases through monetary easing so that nominal wage growth rises sufficiently relative to prices.”

The Bank of Japan estimates that the country’s consumer price index is likely to exceed 2% for the foreseeable future as past increases in import prices are passed on to consumer prices.

However, pass-through is expected to plateau and fall below 2% from the third quarter of 2023 onwards.

— Lim Huisier

Goldman Sachs named three global companies expected to benefit from the German government’s plan to spend around €5 trillion on renewable energy infrastructure.

Goldman Sachs estimates that the plan will create investment opportunities worth around €400 billion ($440 billion) in clean energy and grid infrastructure.

CNBC Pro subscribers can read more about the three companies here.

— Ganesh Rao

Asian companies exposed to artificial intelligence have seen a 30% increase in value since ChatGPT was announced in November 2022.

However, HSBC warns that investors should consider three significant risks before investing in AI stocks.

CNBC Pro subscribers can read more about the three risks here.

— Ganesh Rao

China’s inflation rate is expected to fall further in April to 0.3%, according to a Reuters poll of 37 economists. The country will release its consumer price index on Thursday.

If the forecast turns out to be accurate, inflation will fall for the third month in a row and its lowest level since February 2021, when inflation was -0.2%.

Inflation in China was 0.7% in March after declining from a peak of 2.1% in January.

— Lim Huisier

Bitcoin and gold prices rose Wednesday morning after the latest CPI report showed inflation rose in April, although the rise was slightly smaller than expected.

Bitcoin rose 2% to $28,241.30 while gold futures hit a session high of $2,056, according to Coin Metrics.

Meanwhile, the US Dollar Index has fallen to 101.305, could go negative for a week, and could go negative for a third straight week.

The correlation between Bitcoin and gold has reached historic highs. Cryptocurrencies are inversely related to the dollar index.

— Tanaya Machel, Gina Francola

The US consumer price index rose 4.9% in April from a year earlier, the Labor Department said Wednesday. Economists surveyed by Dow Jones had forecast a 5% increase from a year earlier.

— Jeff Cox

Shares of Google’s parent company Alphabet rose more than 4% as the search giant unveiled details of new gadgets and generative artificial intelligence tools.

During the announcement at the I/O Developer Conference in Mountain View, California, Google showed off the Pixel 7a Android smartphone. The company also removed the waiting list for its conversational chatbot Bard and unveiled new AI products for search businesses and online office suites.

— Samantha Soobin