Asia markets fall as investors await key U.S. inflation numbers

China’s inflation for April is expected to fall further to 0.3%, according to a Reuters poll of 37 economists. The country will release its consumer price index Thursday.

Should the forecast prove accurate, that would mark the third-straight month of decline in the inflation rate, and the lowest reading since February 2021, when inflation was at -0.2%.

China’s inflation stood at 0.7% in March after coming down from a peak of 2.1% in January.

— Lim Hui Jie

Revenue came in at 1.6 trillion yen, a 5.5% year-on-year decline, while Nintendo’s net profit stood at 432.7 billion yen, better than the company’s 370 billion yen forecast but down more than 9% compared with the last financial year.

The results were mainly due to a fall in sales for its flagship Nintendo Switch console. Nintendo sold 17.97 million Switch units, down 22% from the 23 million recorded in the previous financial year.

Nintendo said “shortages of semiconductors and other components impacted production until around the end of summer” and the company “did not experience the growth in sales mainly during the holiday season” that it saw in the previous year.

For the fiscal year ended March 2024, Nintendo forecast sales of 15 million units of the Switch.

— Arjun Kharpal, Lim Hui Jie

The Australian government should not rest on its laurels and instead work to improve the structural position of the budget in the medium term, according to Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry.

“If you look at what’s projected at the moment: within two years, we are projected to be back into a deficit of $35 billion a year, so that needs to be further addressed,” ACCI chief executive McKellar told CNBC in a Wednesday interview.

Late Tuesday, Treasurer Jim Chalmers announced billions in cost-of-living relief aimed at lowering power bills and consumer prices, with defense and ties with neighboring Pacific nations another priority as Australia looks to counter China’s growing strategic influence in the region, Reuters reported.

In various interviews with Australian media on Wednesday morning, Chalmers and Prime Minister Anthony Albanese rejected concerns that the budget will end up worsening inflation.

Chalmers expects domestic growth to slow to just 1.25% in 2023/24 from 3.25% this fiscal year, in large part due to the 375-basis-points of rate rises from the Reserve Bank of Australia.

“Our assessment is that it is time to pause,” said ACCI chief executive McKellar. “The real test for the success of the budget: will it be seen by the Reserve Bank to take the risk off inflation. If we do see further interest rate increases in the coming months, we may see monetary and fiscal policy potentially pushing against each other. That is a situation we want to avoid.”

— Clement Tan

Korean Air CEO Walter Cho expects a full recovery by the third quarter. The airline has doubled in operating profit compared with 2019, he told CNBC’s “Squawk Box Asia.”

Passenger demand is “very strong right now” and the airline has reached about 90% capacity in passenger traffic, Cho added.

Korean Air is seeing “very strong” demand from China but, Cho said, it is only at about 30% capacity currently. Cho said the airline expects capacity to open up fully by the second half of the third quarter.

Japan has shown strong traffic from the fourth quarter of last year and the first quarter of this year, which the airline expects will continue “all throughout this year,” Cho said.

– Audrey Wan

Singapore’s second-largest lender OCBC posted a record net profit of 1.88 billion Singapore dollars ($1.42 billion) for the first quarter.

This was up 39% year on year and 44% higher compared with the fourth quarter of 2022. Revenue came in at SG$3.35 billion, up 27% compared with the same period last year and 12% higher than the previous quarter.

On a year on year basis, net interest income increased 56%, underpinned by growth in average asset balances and a net interest margin expansion of 75 basis points, due to the rapid increase of interest rates during 2022.

However, growth in net interest income seems to be tapering off, as OCBC said earnings in the recent quarter were driven by an increase in non-interest income.

Non-interest income surged 65% from the fourth quarter of 2022, while net interest income fell 2% compared to last quarter.

Shares of OCBC were trading 1.31% higher on Wednesday.

Japanese conglomerate Mitsubishi Corp posted a record net profit of 1.18 trillion yen ($8.72 billion) for its financial year ended March, the first time net profit has crossed the 1 trillion mark.

The 1.18 trillion yen figure was 25.94% higher compared with the 2021 fiscal year, which saw a net profit of 937.5 billion yen. The earnings were led by gains in the natural gas, industrial materials and real estate segments.

However, the company said that net income for the current financial year will most likely come in lower at 920 billion yen due to high market prices for resources.

Mitsubishi also announced additional share buybacks of 200 billion yen for its 2022 fiscal year, bringing its total amount of buybacks to 370 billion yen. The company estimates 100 billion yen in share buybacks for its current fiscal year.

Shares of Mitsubishi surged 4.04% on Wednesday and was the top gainer on the Topix in terms of index points.

Clean energy stocks have struggled since the pandemic, with negative returns each year since 2021.

However, according to the investment bank Bernstein, the sour sentiment towards the sector may be short-lived.

Analysts at the bank now predict more than 35% upside for 3 clean-energy stocks, two of which trade on U.S. stock exchanges.

CNBC Pro subscribers can read more here.

— Ganesh Rao

Bank of America has doubled down on its buy rating for an electric vehicle charging company and expects its shares to rise by more than 100% over the next 12 months to $5.5 a share.

The EV charging firm is set to release two new models of supercharges, which are expected to power sales in the second half of the year.

CNBC Pro subscribers can read more here.

— Ganesh Rao

South Korea’s seasonally adjusted unemployment rate came down to 2.6% in April, lower than the 2.8% recorded in April 2022.

The 2.6% figure is also lower than March’s unemployment rate of 2.7%.

South Korea’s central statistics organization revealed that the number of unemployed people was at 759,000 in April, down from the 806,000 the same period a year ago.

The country’s seasonally adjusted employment-to-population ratio climbed to 62.6 for persons over 15, higher than 62 in April 2022.

— Lim Hui Jie

Morgan Stanley equity strategists forecasted that China’s A Share market will “lead the next phase of the bull market in Asia,” they wrote in a Tuesday note.

“Price action in the aftermath of the Golden Week holiday is encouraging,” they wrote, pointing to the Shanghai Composite reaching 10-month highs earlier in the week.

“We expect further progress towards our CSI300 [forecast] of 4,500 (+11%) and note in terms of catalysts,” the strategists wrote. The CSI300 closed 0.86% lower at 4,027.88 on Tuesday, with declines led by energy, technology and industrial names.

– Jihye Lee

The Federal Reserve’s increases to interest rates will need more time to work through the economy before inflation abates to a 2% target, according to New York Fed President John Williams.

“Because of the lag between policy actions and their effects, it will take time for the [Federal Open Market Committee’s] actions to restore balance to the economy and return inflation to our 2% target,” Williams said at the Economic Club of New York on Tuesday.

Williams didn’t give any forward guidance as to what the central bank might do at the next FOMC meeting. His remarks did little to move markets in either direction, with all three major indexes still trading lower midday. The Dow Jones Industrial Average lost 75 points, or 0.2%, while the S&P 500 and Nasdaq were trading 0.4% and 0.6% lower, respectively.

— Brian Evans, Jeff Cox

With the trading day more than halfway over, it’s shaping up to be another low-volume day on Wall Street.

The SPDR S&P 500 ETF Trust (SPY), which tracks the broad S&P 500 index, has so far traded less than a third of its 30-day average volume. The SPY has thus far traded 24.18 million shares. That’s well below its 30-day average volume of 76.1 million.

Monday was also a low-volume day, with the SPY trading just 50.04 million shares. That was its lowest-volume day since Nov. 25, when it traded just 30,545,430 shares. That was also a half-day on Wall Street as it followed the Thanksgiving holiday.

— Alex Harring

Regional bank stocks retreated again on Tuesday, but trading in the sector was relatively calm after big swings in recent sessions.

Shares of PacWest were down by about 5.4% in midday trading. Western Alliance fell 3.8%.

The SPDR S&P Regional Banking ETF (KRE) slipped 1.6% and is now down more than 13% since the start of May.

— Jesse Pound