The stocks in the Asia Pacific region have mostly fallen as a result of the hotter-than-expected inflation report of the U.S. The Labor Department has reported that in June, the U.S. inflation increased at a very rapid pace in almost 13 years. It has significantly influenced the performance of diverse stocks in the economic environment in many countries from the Asia Pacific.
In Mainland China, the Shanghai composite fell 1.07 %, and it closed at 3,528,50. The Shenzhen component was also affected as it fell 0.875 % and closed at 15,056.32. The Nikkei 225 in Japan closed 0.38 % lower at the value of 28,608.49. In South Korea, the Kospi dipped 0.2 %, and it closed at 3,264.81. The Hang Seng index in Hong Kong shed 0.69 % as of the closing hour of trading. S&P/ASX 200 in Australia closed 0.31 %, and it was higher at 7,354.70. These losses came only after the U.S. Labour Department made the revelation about the surge in inflation in the U.S.
The performance of the New Zealand dollar was good as it jumped 1.09 % and stood at $ 0.7021. The main reason for the gain was the announcement by the Reserve Bank of New Zealand of the reduction in the prevailing monetary stimulus level, with extra asset purchase as per the ‘Large Scale Asset Purchase’ program to be stopped by July 21.
Rise in inflation in the U.S.
Various factors have led to the surge in the inflation level in the United States of America. The increase in food and energy and the burst in the cost of used vehicles have significantly contributed to inflation. Bottlenecks in supply chains had also contributed to the rising inflation. From the previous year, the consumer price index rose 5.4 %. Moreover, it was the largest climb since August 2008, just prior to the global financial crisis. After the report came to light, there was a fall in the stock market futures. The changes that have taken place following the report shed light on the cute nature of inflation pressures.
Another report that was published by the Labor Department’s Bureau of Statistics indicated that the considerable monthly hike in consumer prices could be interpreted as the negative real wages for the workforce. For the month, the real average hourly wage fell 0.5 %. The 0.3 % rise in the average hourly wage was invalidated due to the increase in the consumer price index (CPI).