Amid apparent currency intervention, Japan's Nikkei loses 2% while Asia-Pacific markets trade unsettled.
Friday saw mixed results across Asia-Pacific markets as U.S. inflation data for June came in at the weakest level in nearly three years, allowing the Federal Reserve to cut interest rates. The annual increase in the consumer prices was 3%, which was less than the 3.3% increase in May. Core inflation, which excludes the cost of food and energy, rose 0.1% month over month and 3.3% year over year in contrast to forecasts of 0.2% and 3.4%, respectively.
Following the announcement of the U.S. inflation figures early on Friday evening, the yen also unexpectedly rose versus the dollar, leading investors and traders to speculate that the nation's finance ministry may have intervened. After trading at 161.52 late on Thursday, the yen was trading at 158.55 regarding the US dollar at about 12 a.m. Tokyo time.
Later on Friday, the value of the currency fell against the US dollar once again, closing at 159.26. Masato Kanda, Japan's top currency diplomat, stated on Friday that the government will intervene the the exchange market as necessary. Kanda reportedly stated that recent yen changes were rather quick, according to Reuters, but she would not say if officials had meddled with the currency.
Kanda reportedly stated that recent yen changes were rather quick, according to Reuters, but she would not say if officials had meddled with the currency.
After achieving fresh closing highs for three straight days and hitting a record-high level on Thursday, Japan's Nikkei 225 fell 2.3%, topping declines in Asia. The Topix experienced a 1.1% decline as well. The small-cap Kosdaq fell 0.3%, and South Korea's Kospi fell 1.2%. On the other hand, the continent Chinese CSI 300 fell 0.2%, while the city's Hang Seng benchmark surged by 1.98%.
The losses occur despite the fact that China's exports exceeded forecasts in June, rising 8.6% year over year against an 8% increase predicted by Reuters economists. Additionally, this exceeded the 7.6% increase observed in May. But imports fell 2.3% from June of the previous year, which surprised analysts who had predicted a 2.8% increase. As a result, China's trade surplus denominated in US dollars increased to $99.05 billion, exceeding the $85 million estimate and surpassing $82.62 billion in May.
Taiwan suffered losses as well; the country's weighted index fell by almost 2% as major companies Foxconn, which trades as Hon Hai Electronic Industry, and Taiwanese Semiconductor fell by more than 4% and more than 3%, respectively. The S&P/ASX 200 index in Australia increased by 0.8%, finishing slightly short of its all-time high of 7,896.9, which was established on March 28.
