Global Market: Japan stocks muted as investors await US CPI report

Japan’s Nikkei share average traded largely sideways on Wednesday as investors awaited key U.S. inflation data for clues on the Federal Reserve’s interest-rate outlook, while uncertainty over the Middle East conflict kept risk appetite in check, Reuters reported.

The Nikkei was last up 0.06% at 67,011.66 as of 0202 GMT, after moving between a 0.26% gain and a 0.35% decline. The broader Topix rose 0.43% to 4,118.18.

Investors were focused on the U.S. Consumer Price Index due later on Wednesday, with the data expected to provide fresh signals on the future path of Federal Reserve interest rates. Market participants remained cautious ahead of the inflation report as they assessed whether the central bank could adjust its rate outlook sooner than expected.

AI stocks mixed

AI-related shares, which have a significant influence on the Nikkei, showed mixed performance. Semiconductor inspection equipment maker Lasertec fell 2.9%, while chemical and advanced materials company Resonac jumped 6.73%.

Broader market sentiment was also affected by renewed concerns over shipping disruptions in the Middle East. United States and Yemen's Iran-aligned Houthis separately reported attacks on shipping on Tuesday.

Iran's top security official also indicated that the strategically important Strait of Hormuz would remain closed unless Washington accepted Tehran's conditions for ending the conflict, adding to uncertainty over global energy supplies.

Mining stocks lead gains

Japan's mining sector was the strongest performer among the Tokyo Stock Exchange's 33 industry sub-indexes, rising 2.75% as oil prices edged higher. Brent crude and U.S. West Texas Intermediate futures were trading around $80 a barrel.

Market breadth on the Nikkei was positive, with 122 stocks advancing, compared with 100 decliners, while three stocks were unchanged.

M3 was the biggest percentage gainer on the index, climbing 9.88%, followed by Yokohama Rubber, which rose 8.39%.

Rakuten Group was the biggest percentage decliner, falling 11.62%, while Sumitomo Metal Mining dropped 4.29%.

With investors awaiting the U.S. inflation report and monitoring developments in the Middle East, Japanese equities remained volatile, with the direction of global interest rates and energy prices likely to remain key drivers for markets, Reuters said.

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