China's Weak Inflation Shows Delayed Recovery, Japan's Current Account Surplus Shrinks

Arjun Pandit
11 May, 2023
Mumbai

Markets in Asia reacted to local economic news and welcomed the cooling of inflation in the U.S. 

Indexes in China and Hong Kong traded down after inflation in mainland China slowed to the lowest level in more than two years on uneven post-Covid recovery. 

The consumer price index rose 0.1% from a year ago in April from a 0.7% rise in March, the National Bureau of Statistics reported Thursday. 

A high base price in April last year played a key role in comparison, dragging the inflation near zero. 

Prices advanced rapidly last year after the ending of zero-Covid policies but the surge in demand put additional pressure on domestic food supply chains. 

Core CPI, which excludes volatile food and energy, was unchanged at 0.7%.  

Services price index rose at the fastest pace in four months to 1% but the overall weakness indicated sluggish Post-Covid rebound. 

In addition, the producer price index, a measure of wholesale inflation, declined at a faster pace of 3.6% in April from 2.5% in March. 

Wholesale prices declined for the seventh month in a row, and most economists anticipate recovery to take between three and five years. 

In Shanghai stock trading, the SSE Composite index decreased 0.1% to 3,315.71 and the Hang Seng index in Hong Kong dropped 0.5% to  19,670.12. 

In Tokyo, the Nikkei 225 index was nearly unchanged at 29,119.06 and Japan reported its second current account surplus in a row in March. 

Current account surplus dropped to 2.278 trillion yen in March from 3.235 trillion yen in February, the ministry of finance reported Thursday. 

The ASX 200 index in Sydney closed nearly unchanged at 7,251.90 and the KOSPI index in Seoul closed down 0.2% to 2,491.0.