Asian stocks extended losses to a one-week low on Wednesday after China’s consumer inflation cooled slightly more than expected in June, pointing to lingering weakness in the economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down about 0.7 percent, touching its lowest point since July 2 and pulling away from this week’s three-year highs. Japan’s Nikkei stock average dropped about 0.4 percent. China’s consumer price index (CPI) rose 2.3 percent in June from a year earlier, shy of the consensus forecast of 2.4 percent.
“The weaker CPI reading suggests inflation pressure is muted. It provides further room for policy easing in the future on the one hand, and also signals the weak demand from the domestic economy on the other hand,” said Wang Jun, economist at the China Centre for International Economic Exchanges in Beijing.