Asian stock markets were mixed after the US and Chinese CPI surprises. Nikkei Rally Extends By Investing.com

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Investing.com– Most Asian stocks moved within tight ranges as investors digested mixed inflation in the U.S. and China and Japan’s Nikkei 225 continued to outperform global indices.

Regional stocks led the weakness on Wall Street overnight as data showed US (CPI) inflation rose slightly more than expected in December, dashing hopes that the Federal Reserve will start cutting interest rates early this year.

But at least . The concept has limited heavy losses in U.S. and Asian stock markets, and traders are still arguing for a final cut in U.S. interest rates this year.

Japanese stock market heads into week with gains beyond 34-year high

Japan was the best performer in Asia this week, rising 1.2% on Friday to nearly 35,500 points, the highest in 34 years. Extremely dovish expectations for the Bank of Japan were the main driving force behind the Nikkei rise. Especially as markets were awaiting further economic stimulus from Japan following the devastating earthquake.

Signs of weakness in Japan’s economy also continued, as data on Friday showed the economy contracted more than expected in November. This data was preceded by soft and readings earlier in the week.

The Nikkei index was expected to rise 6.2% this week, its highest weekly gain since March 2022. The index covering a broad range of Japanese stocks rose 0.3% on Friday and was set to add 4.1% this week. The index also hit its highest level since 1990.

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Chinese stock markets rise as CPI inflation slightly rebounds

China and the index rose 0.4% and 0.5% respectively, recovering further from multi-year lows after December data showed a slight rise. The Hong Kong index rose 0.1%.

Broad-based Chinese inflation still remains deep in disinflation territory, but a moderate rise in CPI inflation has sparked hopes that consumer spending is heading toward a recovery from the coronavirus-era lull. The increase in CPI was primarily driven by increases in holiday spending, particularly travel and shopping.

However, it is not yet known whether these numbers signal a larger recovery or a one-time rise.

The outlook for China’s economy remains weak. (PPI) Inflation declined for the 15th straight month in December.

The focus now turns to key fourth quarter data to be released next week.

Broader Asian markets are cruising along, tracking similar overnight performance on Wall Street. Most regional stocks also saw mild weekly declines as growing doubts about a U.S. interest rate cut made traders wary of risk-focused assets.

Australia fell 0.1%, and Korea fell 0.2%.

Indian index futures remain flat after index heavyweights infosys Ltd (NS:) posted a weak profit in the December quarter. However, the company’s American Depositary Receipts (NYSE:) surged nearly 4% in overnight trading.

India data could also be tapped later in the day.