Asia-Pacific markets mixed after U.S. inflation report reinforces Fed rate cut expectations

Asia-Pacific markets traded mixed on Thursday after the U.S. October consumer price index reading reinforced expectations that the Fed would cuts rates again in December.

The CPI came in line with expectations, accelerating slightly to an annual inflation rate of 2.6%. Core CPI, which straps out volatile food and energy prices, gained 3.3% last month, also matching expectations.

Australia’s unemployment rate remained steady in October at 4.1%, as economists had expected, while the number of employed people increased 15,900 from a month ago, falling short of the expected 25,000.

The participation rate, which measures the share of working-age people currently employed or seeking a job, stood at 67.1%, slightly below an estimated 67.2%.

“It is clear that the labour market in Australia is still very resilient, despite an extended period of restrictive rates,” said My Bui, economist at investment management firm AMP.

Bui believes the Reserve Bank of Australia is unlikely to deliver a cut in December, but sees room for easing in the first half of 2025.

Australia’s S&P/ASX 200 was up 0.26%.

Japan’s Nikkei 225 gained 0.10% while the Topix added 0.46%.

Japanese yen appreciated slightly against the U.S. dollar to 155.36 on Thursday, after falling below the 155 benchmark overnight, hovering near the lowest level in over four months.

South Korea’s Kospi rose 0.28%, while the Kosdaq Index was up by 0.42%. The country’s markets opened an hour later than usual on Thursday because of national college entrance exams.

Hong Kong’s Hang Seng index was down 0.69% in a choppy trading morning, following a multi-day losing streak that saw the index shed 4% this week as of Wednesday’s close.

Hong Kong’s markets remained open even as authorities issued a Typhoon warning, marking the first such occasion since the city changed the rules to allow trading in extreme weathers.

Mainland China’s CSI 300 tumbled 0.27%.

Overnight in the U.S., the S&P 500 and Dow Jones Industrial Average closed near the flatline following the release of the inflation report.

The S&P 500 inched higher by 0.02% to close at 5,985.38, while the 30-stock Dow ticked up 47.21 points, or 0.11%, to 43,958.19. The Nasdaq Composite ended the day with a 0.26% decline and closed at 19,230.74.

The inflation data puts the Federal Reserve on course to lower interest rates next month, with markets pricing in a 80.8% likelihood of a quarter-percentage-point cut, according to the CME FedWatch Tool.

— CNBC’s Brian Evans and Hakyung Kim contributed to this report.