China CPI, PPI; Fed December minutes

Asia-Pacific markets tumbled Thursday in a choppy session as investors fretted the Federal Reserve could delay policy easing due to inflation worries, while China’s entrenched consumer disinflation further dented sentiment.

China’s inflation data for December released Thursday showed the consumer price index edged up 0.1% last month from a year ago, while the producer price index dropped 2.3% year-on-year, sliding for the 27th straight month.

Hong Kong’s Hang Seng index gave up modest gains earlier, trading marginally lower, while mainland China’s CSI 300 dipped 0.05%.

Economists at Barclays expect the CPI to stay low for longer and PPI to remain in deflation throughout 2025, they said in a note after the data release, while cutting the full-year inflation forecast to 0.4% due to a lack of demand-side stimulus, looming tariff hikes and structural headwinds.

Japan’s benchmark Nikkei 225 slipped 1.27% and the Topix fell 1.30%. The Japanese yen strengthened slightly to 158.08 against the U.S. dollar, recovering from the five-month low on Wednesday.

Australia’s S&P/ASX 200 lost 0.37% to close at 8,317.80.

South Korea’s Kospi index added 0.1% in a volatile session and the small-cap Kosdaq slid 0.13%.

Overnight stateside, the S&P 500 and the Dow Jones Industrial Average posted narrow gains after the minutes from the Federal Reserve’s December meeting revealed most committee members see inflation risks have increased.

The U.S. 10-year Treasury yields briefly topped 4.7%, as the inflation outlook fueled investors’ concerns that the Fed may slow the pace of policy easing this year.

The broad market index gained 0.16% to close at 5,918.25, while the Dow added 0.25% to finish at 42,635.20. The Nasdaq Composite was little moved, ending at 19,478.88.

The U.S. stock markets will be closed on Thursday and Treasuries have a shortened session in observance of a national day of mourning for former President Jimmy Carter.

— CNBC’s Pia Singh and Sean Conlon contributed to this report.