WORLDWIDE: HEADLINES 

Japan April Consumer Inflation Seen Exceeding Central Bank’s 2% Goal 

Japan’s core consumer inflation in April is expected be slightly higher than the central bank’s 2% target, hitting a seven-year peak as sharp climbs in fuel and global commodity costs push up the cost of living. 

Analysts expect consumer inflation to hover around 2% in the coming months as stubbornly high raw material costs force more firms to hike prices, complicating the Bank of Japan’s efforts to convince markets it will keep monetary policy ultra-loose. 

The nationwide core consumer price index (CPI), which excludes volatile fresh food costs but includes energy costs, is projected to have risen 2.1% in April from a year earlier, a Reuters poll showed. 

Also driven by the dissipating effect of past cellphone fee cuts, the figure marks fastest pace of increase since March 2015, when the index jumped 2.2%. It follows a 0.8% rise in the previous month. 

BOJ Governor Haruhiko Kuroda has repeatedly said the central bank will be in no rush to withdraw its massive stimulus on the view that the expected cost-push rise in inflation will be temporary. 

Full coverage: REUTERS 

Gold Faces Fourth Weekly Loss As Burgeoning Dollar Saps Appeal 

Gold prices held ground near a three-month low on Friday as the strongest dollar in two decades continued to sap demand for greenback-priced bullion, setting up what could be the metal’s fourth consecutive weekly fall. 

In choppy price action, spot gold was flat at $1,823.25 per ounce, as of 0244 GMT, hovering near its lowest level since Feb. 7 hit earlier in the session. 

U.S. gold futures edged down 0.1% to $1,823.00. 

“The fall through support by gold at $1,835.00, and the sell-off in other precious metals overnight, leave gold vulnerable to deeper losses and a potential test of support at $1,780.00 an ounce,” OANDA senior analyst Jeffrey Halley said. 

The dollar steadied near a fresh 20-year high scaled on Thursday as concerns persisted that the U.S. Federal Reserve’s actions to tame inflationary pressures would crimp global economic growth, boosting the currency’s safe-haven appeal. 

Full coverage: REUTERS 

WORLDWIDE: FINANCE/BUSINESS 

Asian Shares Trim Losses, While Dollar Firms On Powell’s Rate Pain Warning 

Asian shares found some footing after a volatile session for U.S. equities, but the dollar remained at 20-year highs and global stocks near 18-month lows on worries about persistently high inflation and tightening central banks. 

Those worries ultimately overcame hopes on Wall Street that high inflation might be peaking, pushing the S&P 500 close to confirming a bear market on Thursday, at nearly 20% off its January all-time high. 

In an interview later in the day, U.S. Federal Reserve Chair Jerome Powell said that the battle to control inflation would “include some pain”. And he repeated his expectation of half-percentage-point interest rate rises at each of the Fed’s next two policy meetings, while pledging that “we’re prepared to do more”. 

But after fears of the impact of central bank tightening led to sharp losses a day earlier, Asian shares bounced early in the trading day. 

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) was up 1.15%, trimming its losses for the week to around 3.5%. 

Australian shares (.AXJO) were up 1.56%, while Japan’s Nikkei stock index (.N225) jumped 2.62%. 

In China, the blue-chip CSI300 index (.CSI300) was up 0.92% and Hong Kong’s Hang Seng (.HSI) rose 1.8%. 

“We had some pretty big moves yesterday, and when you see those big moves it’s only natural to get some retracement, especially since it’s Friday heading into the weekend. There’s not really a new narrative that’s come through, ” said Matt Simpson, senior market analyst at City Index. 

Full coverage: REUTERS 

Market Nerves Prop Up Safe-haven Dollar, Yen 

The yen held most of its overnight gains on Friday, after falling U.S. yields and market jitters propped up the Japanese currency while another Wall Street selloff drove flight-so-safety bid to dollar, which remains near 20-year high peaks. 

The yen was at 129.14 per dollar on Friday morning, softening on the day after it had reached a two-week peak of 127.5 overnight. 

Thursday’s 1.2% decline for dollar/yen was its biggest daily percentage fall this year. The euro/yen cross declined 2.5%, its biggest daily percentage fall since 2016 as the common currency a victim of the “risk off” mood. 

“The yen is perhaps the most obvious signal of a shift from a world where yields were dominant and risk was resilient (yen negative), to a world this week where the dominant force is sour risk appetite driving yields lower (yen positive),” said Alan Ruskin, macro strategist at Deutsche Bank in a note. 

The benchmark U.S. 10-year yield was 2.8822% having declined each session this week from Monday’s high of 3.203%. 

Rising U.S. yields at a time when the Bank of Japan was intervening to keep Japanese benchmark yields pinned down caused the yen to soften this year. 

Full coverage: REUTERS  

Oil Climbs Even As Weaker Demand Concerns Cap Gains 

Oil prices firmed in early trade on Friday but were headed for their first weekly losses in three weeks as worries about inflation and China’s COVID lockdowns slowing global growth outweighed concerns about dwindling fuel supply from Russia. 

Brent crude futures were up 97 cents, or 0.9%, at $108.42 a barrel at 0008 GMT, while U.S. West Texas Intermediate (WTI) crude futures climbed $1.00, or 0.9%, to $107.13 a barrel. 

Both benchmark contracts were, however, on track to post declines for the week, with Brent set to drop more than 3% and WTI more than 2%. 

The market is continuing to be pushed and pulled by the prospect of a European Union ban on Russian oil sapping supply and concerns about demand being dented by weaker global growth, inflation and China’s COVID curbs. 

“The demand concern factors have grown quite a bit,” said Commonwealth Bank commodities analyst Vivek Dhar. 

Inflation and aggressive rate rises have driven the U.S. dollar to 20-year highs, which has capped oil price gains because the strong dollar makes oil more expensive for buyers holding other currencies. 

Full coverage: REUTERS