Asia Stocks Steady as Investors Digest U.S. Inflation Surprise

Asian markets stabilized on Friday after an initial sell-off triggered by stronger-than-expected U.S. inflation data. The region’s recovery was uneven, with Japan’s Nikkei 225 climbing 1.6% on the back of better-than-forecast second-quarter GDP growth, while the MSCI Asia-Pacific index excluding Japan edged down 0.2%.

The rebound came a day after U.S. producer prices for July rose 0.9% from the previous month, sharply above market expectations. The data cooled bets on a larger Federal Reserve rate cut next month, with traders now overwhelmingly anticipating a 25 basis-point reduction instead of 50 basis points.

Chinese equities moved higher despite disappointing retail sales and industrial output figures, as investors speculated on fresh economic stimulus from Beijing. The CSI 300 gained 0.8%, while Hong Kong’s Hang Seng fell 1.1% amid weakness in technology shares.

Elsewhere, U.S. stock futures held firm, Treasury yields dipped, and the dollar gave back some of its earlier gains. In commodities, Brent crude traded flat, gold prices inched higher, and cryptocurrency markets saw mixed moves — Bitcoin eased from record levels, while Ether advanced nearly 2%.