Asia-Pacific Markets Mixed as Investors Weigh Japan Inflation Data, Trump Tariff Threats

Japan's inflation rate in January climbed to 4%, hitting its highest level since January 2023.

Core inflation — which excludes prices of fresh food — rose to 3.2%, beating economists' expectations of 3.1%, according to a Reuters poll. This figure was the highest since June 2023.

The so called "core-core" inflation rate, which strips out prices of both fresh food and energy and is closely monitored by the BOJ, climbed slightly to 2.5%.

The headline inflation has remained above the Bank of Japan's 2% target for 34 straight months.

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—Lim Hui Jie

Stocks close lower

Stocks fell on Thursday as a weak outlook from Walmart pressured the broader market and worried investors about the health of earnings moving forward.

The Dow Jones Industrial Average slipped more than 450 points, or 1%, to close at 44,176.65. The Nasdaq Composite lost nearly 0.5% to end at 19,962.36, while the S&P 500 pulled back 0.4% to finish the session at 6,117.52.

— Brian Evans

Morgan Stanley upgrades MSCI China to equal weight

After a difficult decade for MSCI China, Morgan Stanley says there is a slight improvement in the equity risk premium for Chinese stocks.

Strategist Jonathan Garner upgraded the MSCI China Index to equal weight from underweight in a research note on Wednesday. Return on equity trends are improving in favor of China, per Garner.

The upgrade "has less to do with the top down macro environment where our economists remain below consensus on nominal GDP growth in 2025," the strategist wrote.

"Instead it is mainly a micro bottom-up self help story at the stock level in the context of a significant shift in index weights as weaker / more deflation impacted sectors are much diminished in sector representation," Garner added.

He noted that artificial intelligence enthusiasm is also boosting sentiment around e-commerce and internet stocks.

The iShares MSCI China ETF is up more than 14% in 2025.

— Hakyung Kim