Inflation Stalemate: Asian Markets Held in Check Amid U.S. Economic Jitters

Asian shares experienced a downturn as the U.S. revealed stagnating progress in curbing inflation, despite strong economic indicators. Doubts over the Federal Reserve's future interest rate policies loom ahead of the Thanksgiving holiday. Meanwhile, South Korea's central bank unexpectedly slashed interest rates to address slowing inflation.

Asian shares experienced a subdued session on Thursday, with the U.S. dollar on the defensive, following data indicating that progress in curbing inflation had stalled. Economic robustness persisting despite these inflationary pressures raised uncertainty about the Federal Reserve's policy trajectory for the upcoming year.

As the U.S. Thanksgiving holiday approaches, resulting in thin trading volumes, traders are exercising caution in placing substantial bets. MSCI's broadest index of Asia-Pacific shares outside Japan fell by 0.07%, even as Japan's Nikkei saw a 0.46% increase.

Investor sentiment remains fragile amid potential tariff wars due to U.S. President-elect Donald Trump's policies. Though U.S. consumer spending slightly exceeded expectations in October, data suggests significant inflation rate reduction has stalled recently. This lack of progress, combined with potential higher tariffs on imports, raises concerns about the Fed's scope for interest rate cuts next year.

(With inputs from agencies.)