Asian Stock Market: Trades sideways amid the mixed sentiment ahead of the US CPI

• Asian equities trade flat on Tuesday amid the mixed sentiment.
• The fear of China’s deflationary pressures is easing following the upbeat Consumer Price Index (CPI) data.
• Japanese Finance Minister said that specific monetary policy depends on the Bank of Japan (BoJ) to decide.
• Investors await the US CPI data and Chinese economic data.

Asian stock markets trade sideways on Tuesday amid the mixed sentiment. The US Dollar (USD) consolidates its recent losses and hovers around 104.55 ahead of the US Consumer Price Index (CPI) data due on Wednesday.

At press time, China’s Shanghai is up 0.10% to 3,145, the Shenzhen Component Index surges 0.29% to 10,411, Hong Kong’s Hang Sang is up 0.08% to 18,110, South Korea’s Kospi declines 0.50% and Japan’s Nikkei climbs 0.61%.

China's consumer prices returned to positive territory in August, suggesting that deflationary pressures are easing as the economy shows signs of stability. The Chinese Consumer Price Index (CPI) for August came in at 0.1% YoY versus a 0.3% drop in the previous reading, below the market consensus of a 0.2% rise. While, the monthly figure came in at 0.3%, as expected.

Japan’s Finance Minister Shunichi Suzuki said on Tuesday that he expects the Bank of Japan to conduct appropriate monetary policy and collaborate with the government to attain the inflation target while taking the economy, prices, and financial conditions into consideration. On Monday, the benchmark 10-year Japanese Government Bond (JGB) yield hit the highest level since January 2014 on expectations that the BOJ will abandon its negative rate policy following Ueda's remarks.

BoJ Governor Kazuo Ueda stated in an interview on Monday that the central bank would have sufficient evidence by the end of the year to evaluate whether interest rates should stay negative.

Market players will keep an eye on the release of the US Consumer Price Index for August on Wednesday and Retail Sales on Thursday. The US CPI figure is expected to rise by 0.5%, while the core monthly figure is expected to remain at 0.2% These figures could offer hints about the peak interest rate by the Federal Reserve (Fed) for the rest of the year. Additionally, the Chinese Retail Sales and Industrial Production data due on Friday might trigger volatility in the market.