Asian shares mixed ahead of key US inflation data

TOKYO (AP) — Asian shares were mixed Thursday ahead of a closely watched report on U.S. inflation that is viewed as a good indicator of whether Wall Street’s recent rising optimism is warranted or overdone.

Japan's benchmark Nikkei 225 wobbled in early trading and was up less than 0.1% at 26,448.13 in afternoon trading. Australia's S&P/ASX 200 jumped 1.2% to 7,280.40. South Korea's Kospi gained 0.5% to 2,370.58. Hong Kong's Hang Seng lost 0.1% to 21,406.02, while the Shanghai Composite shed nearly 0.2% to 3,156.48.

“All eyes are on the arrival of U.S. inflation data this week,” Clifford Bennett, chief economist at ACY Securities, said in a report.

Japan's Finance Ministry reported the country's current account returned to the black in November for the first time in two months, reflecting a slimming of the trade deficit as the yen regained value against the U.S. dollar and other currencies.

On Wall Street, the S&P 500 climbed 1.3% to 3,969.61 for its second straight gain. The Dow Jones Industrial Average rose 0.8% to 33,973.01, while the Nasdaq composite gained 1.8% to 10,931.67.

Stocks began 2023 with gains driven by hopes that cooling inflation and a slowing economy may lead the Federal Reserve to ease off its steep interest rate hikes. Such increases can help stamp out high inflation, but they also slow the economy and raise the risk of a recession while hurting prices for stocks and other investments.

Economists expect CPI Thursday’s report to show inflation is continuing to cool from its summertime peak, down to 6.5% last month from 7.1% in November and from more than 9% in June. The hope on Wall Street is that such a trend toward normal could convince the Fed to soon halt its blistering set of rate increases, often triple the usual amount.

Some investors...