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Morning Edition · Monday, August 10, 2026Published at 1:10 AM EDT · New York
Asian Shares Advance With Tokyo Leading as Traders Wait on United States Inflation Data
The July consumer price index is due Wednesday, with the June reading at 3.5 percent leaving investors split between rate cuts and renewed tightening.
Asian equity markets opened the week higher, with Tokyo leading gains of roughly 2 percent, according to the morning market summary published by Globes. The Israeli financial daily also reported that oil prices edged up on uncertainty over the Strait of Hormuz and that Wall Street's leading indexes finished last week at record highs. CoinDesk described global stocks as trading near a record.
The next test arrives on Wednesday, when the Bureau of Labor Statistics publishes the consumer price index (CPI) for July. The June report showed annual inflation at 3.5 percent, down from 4.2 percent in May, with core inflation excluding food and energy at 2.6 percent and energy costs still 15.7 percent higher than a year earlier, according to Trading Economics.
That combination explains the split in positioning. Headline inflation is falling because the earlier energy spike is dropping out of the annual comparison, not because monetary conditions have tightened. If the Gulf disruption pushes fuel prices back up, the improvement reverses.
The rally remains narrow, though. When the Nikkei rose 3.66 percent to 66,300.44 earlier this month, semiconductor stocks led the move, with Advantest up 8.77 percent and Tokyo Electron up 3.26 percent, tracking a 6.6 percent gain in the Philadelphia Semiconductor Index. Index records built on a handful of correlated positions carry the drawdown risk of those positions.
Part of a tracked trend
Renewed Fed Tightening Fears Rattle Global Markets
Over the next 3-6 months stronger US data revives expectations of Fed rate hikes, driving a firmer dollar, equity selloffs in export-heavy markets, and pressure on hard assets as the IMF warns of recurring economic shocks.
What this means
A July inflation print that reverses June's decline would push expectations back toward higher policy rates. That would strengthen the dollar, pressure Asian and European exporters through weaker local currencies, and lower the valuations of the long-duration equities driving current index gains. A soft print would do the opposite and extend the rally, which is why a small group of semiconductor stocks now carries the index risk for everyone.
What to watch
- The core reading in Wednesday's report, since it strips out the Gulf energy effect and shows whether underlying price pressure is still easing.
- Whether the gains in Tokyo broaden beyond chip-linked names into banks and domestic sectors, which would indicate the rally rests on more than one trade.
- The dollar against the yen and the euro after the data, because a sharp move would show markets repricing the direction of United States policy rather than just its pace.
Observations to monitor, not financial advice.
Synthesized from: Globes (Hebrew) · CoinDesk · US Bureau of Labor Statistics
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Comments
1Aug 11, 12:47 AM · edited
The 90 basis point gap between June headline CPI (3.5 percent) and core (2.6 percent) is food and energy, so Strait of Hormuz supply risk could bias Wednesday's July print above the recent trend.