After a bright January, traders have endured a shaky couple of weeks as they contemplate the prospect of more Federal Reserve interest rate hikes aimed at cooling a still-robust US economy.
The main blow came from a blockbuster jobs report earlier in the month that led several central bank officials to insist they will keep tightening monetary policy until they have brought prices under control.
The consumer price index is forecast to have dipped to 6.2 percent last month from 6.5 percent in December, according to Bloomberg.
That is still well above the Fed's target of two percent, and analysts said a higher read on the CPI could spark a hefty sell-off on markets, with traders already worried the United States could tip into recession.
"I would expect to see a little more apprehension, even anxiety, in the run-up to the release after the jobs report left investors on edge," said OANDA's Craig Erlam.
"In an ideal world, slack would be gradually appearing in the labour market as inflation steadily fell to two percent, allowing the Fed to take its foot off the (brake). As soon as one of these isn't playing ball, the other has to up its game.
"A slight setback could be a major blow and leave at least two more hikes, maybe more, on the cards."
Wall Street provided a healthy lead with all three main indexes ending more than one percent higher, but Asian traders struggled to maintain momentum after a strong start.
Tokyo rose along with Shanghai, Sydney, Seoul, Taipei, Mumbai and Jakarta.
Hong Kong was dragged down by another drop in Chinese tech firms, while there were also losses in Singapore, Manila and Bangkok.
Wellington was barely moved as traders tracked developments after New Zealand was pounded by a strong cyclone that forced the government to declare a national state of emergency.
London, Paris and Frankfurt all opened on the front foot.
Strategists at Morgan Stanley warned equities could suffer sharp losses this year, however.
"While the recent move higher in front-end rates is supportive of the notion that the Fed may remain restrictive for longer than appreciated, the equity market is refusing to accept this reality," the group, led by Michael Wilson, wrote in a note.
They saw the S&P 500 suffering a rollercoaster ride before ending the year almost five percent below Friday's close.
"The risk-reward is as poor as it's been at any time during this bear market," Wilson said. "The reality for equities is that monetary policy remains in restrictive territory in the context of an earnings recession that has now begun in earnest."
The yen ticked up slightly against the dollar Tuesday as Japanese Prime Minister Fumio Kishida nominated respected economics professor Kazuo Ueda to take the helm at the Bank of Japan.
Ueda will be tasked with kickstarting the torpid economy while also facing pressure to join international peers in tightening monetary policy after years of ultra-loose measures.
The bank last year made small adjustments that allowed the yield of government bonds to move in a wider band, which sent the yen surging, though it has made no more changes since then.
The nomination came as data showed Japan's gross domestic product expanded at a lower-than-expected 0.2 percent in the last quarter of 2022.
Saori N. Katada, an international relations professor at the University of Southern California, told AFP: "This is probably the hardest job at the worst time to take up. Professor Ueda is very brave to accept it."
Japan's easy-money policies have become "extreme... and no one knows how to get out of it", as sudden policy pivots could "jeopardise fiscal sustainability", she said.
Toshiba revises down forecasts as it weighs buyout
Tokyo (AFP) Feb 14, 2023 - Japanese conglomerate Toshiba on Tuesday revised down its annual forecasts as it said it was still weighing a purchase proposal that would take it private after months of wrangling.
In April last year, the firm said it was suspending a plan to split in two after a shareholder vote against the idea and would weigh going private.
Last week, Toshiba confirmed that it had received a "proposal" from a consortium led by Japan Industrial Partners (JIP), but without further details.
On Tuesday, chief financial officer Masayoshi Hirata reiterated "right now, the special committee is closely studying the content of the proposal".
But he declined to give a timeframe for evaluating the offer, which the Nikkei business daily said was around 2 trillion yen ($15 billion).
Mega banks Sumitomo Mitsui Banking and Mizuho Bank will each offer loans worth 500 billion yen, while companies including financial services firm Orix, electronic parts maker Rohm and power utility Chubu Electric would offer a total of around one trillion yen, it said.
For the October-December period, Toshiba posted a net loss of 16.7 billion yen, against a 55.1 billion yen net profit a year earlier.
Operating profit dropped 87.5 percent year-on-year to 5.3 billion yen on sales of 774.9 billion yen, down 4.2 percent, due partly to weak sales in the "electronic devices and storage solutions" segment, it said in a statement.
For the full-year to March 2023, the firm revised down its expected operating profit to 95 billion yen and sales to 3.32 trillion yen -- both down less than one percent from the previous forecasts in November -- on "one-off factors".
The firm also announced Tuesday its chief executive officer Goro Yanase was stepping down over entertainment expenses misconduct.
Once a symbol of Japan's advanced technology and economic prowess, Toshiba has been rocked by a series of scandals, financial troubles and shock high-level resignations in recent years.
The process of Toshiba's restructuring has dragged on for almost two years since the first proposal was made.
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