Asian markets await inflation data, wait for Fed plans

Asian shares fell on Wednesday as investors waited for a key U.S. report on inflation to give hints on the Federal Reserve'sFederal Reserve's plans for future monetary tightening.

The Consumer Price Index CPI report will be released later today, with markets watching for signs that inflation has slowed in July despite the strong U.S. jobs numbers.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.51 per cent, while Japan's Nikkei extended losses from the previous day and was down 0.65 per cent.

South Korea's KOSPI was lost 0.64 per cent, Australia's AXJO dropped 0.12 per cent, and Taiwan's TAIEX fell 0.70 per cent.

David Chao, a market strategist for Asia Pacific ex-Japan, said I don't think that we are through the bear market woods yet recession risks loom and I don't think the Fed is done with its aggressive belt tightening.

I don't think markets have fully discounted these variables. This week s inflation data will give us more clarity on the Fed's near-term policy outlook. Wall Street closed on Tuesday with all three major indices down, and the slips in Asian markets followed by Wall Street.

The S&P 500 fell 0.42 per cent, the Dow Jones Industrial Average fell 0.18 per cent, and the Nasdaq Composite fell 1.19 per cent.

The dollar bounced back overnight and was trading flat in Asia. The dollar index, which measures the safe-haven greenback against six major peers, was down 0.009 per cent at $106.330.

A strong CPI print this week could mean the Fed is back to its aggressive rate hiking path, which would re-strengthen the USD, said Chao.

Oil prices fell after an overnight surge petered out. Brent crude futures fell 15 cents to $96.16 a barrel, while the U.S. West Texas Intermediate WTI crude fell 22 cents to $90.28.

The price of gold was down 0.09 per cent at $1,792, down 0.09 per cent. 54 an ounce. It broke through the $1,800 barrier overnight for the first time in more than a month.

The price of cryptocurrencies, which often tracks tech stocks, was down 1.08 per cent at $22,891.