Asia-Pacific markets mostly declined on Friday, tracking losses on Wall Street as escalating tensions between Washington and Tehran dampened investor sentiment.
By 11:50 am AEDT (12:50 am GMT), Australia’s S&P/ASX 200 was down 0.2%, while Japan’s Nikkei 225 fell 1%.
In contrast, South Korea’s KOSPI 200 rose 1.1%, extending fresh record highs.
Economic data from Japan showed headline inflation slowed to 1.5% in January, marking its lowest level since March 2022 and ending a run of 45 consecutive months above the Bank of Japan’s 2% target.
Core inflation, which excludes fresh food prices, eased to 2%, down from 2.4% in December and matching the 2% forecast, while the so-called “core-core” measure, which strips out both fresh food and energy, fell to 2.6% from 2.9%.
The moderation was attributed to declines in fresh food, raw meat and fresh flower prices, as well as a sharper drop in petroleum product costs.
At the same time, preliminary business surveys from S&P Global indicated that private sector activity in Japan expanded at its fastest pace since May 2023. The Flash Japan Services PMI Business Activity Index edged up to 53.8 in February from 53.7 in January, while the Flash Manufacturing PMI rose to 52.8 from 51.5.
According to S&P Global, growth momentum continued to build across the Japanese economy in February, with overall sales rising at the strongest pace since May 2023 and employment increasing solidly. Business optimism also climbed to a 15-month high.
In Australia, however, PMI data pointed to a loss of momentum. The Flash Australia Services PMI Business Activity Index fell to 52.2 in February from 56.3 in January, while the Flash Manufacturing PMI slipped to 51.5 from 52.3.
S&P Global said that, following a strong start to the year, private sector expansion eased in February, with broad-based slowdowns across manufacturing and services in both output and new orders.
Overnight, investors saw a softer session in the United States, where the Dow Jones Industrial Average dropped 0.5%, the S&P 500 lost 0.3% and the Nasdaq Composite dipped 0.3%.
In commodity markets, Brent crude rose 1.9% on Thursday to settle at US$71.66 per barrel, its highest level since 1 August, as traders assessed the risk of supply disruptions amid US-Iran tensions.
Spot gold added 0.4% to US$4,996.49 per ounce, benefiting from safe-haven demand.
Elsewhere in Asia, mainland Chinese markets remained closed for the Lunar New Year public holiday.
Hong Kong’s Hang Seng Index was also shut, while India’s BSE Sensex declined 1.5% to 82,498.1.
European equities had also finished lower overnight. The UK’s FTSE 100 fell 0.6% to 10,627.0, Germany’s DAX dropped 0.9% to 25,043.6, and France’s CAC 40 eased 0.4% to 8,398.8.
