SINGAPORE – Asia-Pacific markets fell on Friday as investors assess risks associated with new omicron Covid variant and anticipate key US inflation data

Japan’s Nikkei 225 extended its losses from the previous session and lost 0.16% at the start of trading. The Topix index traded slightly higher.

In South Korea, the Kospi fell 0.67% while the Kosdaq was down 0.55%.

Australian stocks also traded lower. The ASX 200 fell 0.3%, with the energy sub-index falling 1.13% as oil prices fell overnight.

Energy names in Australia sold off: Santos shares fell 1.36%, Oil Search 1.45% and Woodside Petroleum fell 0.63%.

Friday’s session in Asia follows overnight declines on Wall Street.

“The more cautious tone in the risk market probably has as much or more to do with apprehension ahead of tonight’s US CPI report,” said Ray Attrill, head of currency strategy at National Australia Bank. , in a morning note.

Inflation data for the United States

In the United States, the Department of Labor is expected to release the November Consumer Price Index Friday morning local time, which measures the cost of dozens of items.

Estimates suggest that the reading could mark its highest year-over-year level since 1982.

While a surge in inflation is hardly new to the market, investors will be looking to see how high the level is and what kind of reaction could trigger from the US Federal Reserve.

“We expect the data to reinforce the fact that core inflation in the United States is both broad and high,” said Kim Mundy, senior economist and currency strategist at the Commonwealth Bank of Australia, in an early morning note. “It is important to note that another strong impression will reinforce the hawkish turn of FOMC Chairman Jay Powell last week.”

Last week, the Fed chairman said it was “probably a good time to remove” the word “transient” from describing inflation and promised that the central bank would be vigilant in controlling inflation.

At its policy meeting next week, the Fed is expected to announce that it will step up the pace of its reduction in bond purchases, while also likely hinting at a more aggressive path for interest rate hikes in 2022.

CNBC Pro’s Stock Picks and Investment Trends:

Currencies and commodities

In the currency market, the US Dollar last traded at 96.271 against a basket of its peers, rising in the previous session from levels near 95.967. Analysts said new concerns about the impact of the omicron strain on the economic recovery had likely supported the greenback.

The Japanese yen was little changed, trading at 113.44 per dollar, while the Australian dollar was also relatively stable at $ 0.7147.

Oil prices fell overnight, with Brent down 1.9% to $ 74.42 a barrel and US crude down 2% to $ 70.94.

During Asian trading hours on Friday, US crude extended its losses, down 0.54% to $ 70.56.