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Asia-Pacific markets drop as Japan posts cooler-than-expected core inflation data

Pedestrians cross an intersection in the Shibuya district of Tokyo, Japan, on Tuesday, April 25, 2023. Photographer: Kentaro Takahashi/Bloomberg via Getty Images

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Asia-Pacific markets fell Friday after Japan’s May core inflation data came in slightly cooler than expected.

The country’s core inflation rate — which strips out prices of fresh food — came in at 2.5%. A Reuters poll of economists expected the May core inflation reading to come in at 2.6%, compared with April’s 2.2%.

The so-called “core-core” inflation, which strips out prices of fresh food and energy, came in at 2.1%. This is lower than April’s reading of 2.4%. The metric is considered by the Bank of Japan when formulating the country’s monetary policy.

Japan’s headline rate rose to 2.8%, higher than April’s figure of 2.5%.

Japan’s Nikkei 225 dipped marginally, while the broad-based Topix gained 0.26%.

The yen weakened for a seventh straight day, declining to 158.95 against the U.S. dollar.

Japan’s chief currency diplomat, Masato Kanda, said the government was ready to make a move against the volatile currency market that has hurt the economy, Reuters reported.

The U.S. Treasury Department placed Japan on its currency “Monitoring List,” but did not classify it as a currency manipulator.

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South Korea’s Kospi fell 0.73%, while the small-cap Kosdaq lost 0.27%.

Separately, the country announced that the finance ministers of South Korea and Japan will meet on June 25 to discuss bilateral and multilateral cooperation, as well as their views on the global economy. The meeting will be held two months after both parties agreed to manage excessive currency volatilities during their meeting in Washington.

Mainland China’s CSI 300 dipped marginally, while Hong Kong’s Hang Seng index declined 0.85%.

Australia’s S&P/ASX 200 slid 0.04%.

Overnight in the U.S., the S&P 500 closed 0.25 % lower after hitting a new high. The Nasdaq Composite dipped 0.79%, while the Dow Jones Industrial Average climbed 0.77%. Nvidia slipped 3.5% after rising earlier in the trading day.

—CNBC’s Samantha Subin and Brian Evans contributed to this report.

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