HONG KONG — Asian markets were largely stronger Friday after US inflation data renewed speculation of an interest rate hike, advancing despite disappointing Japanese figures that challenged Tokyo's war on falling prices.
Official data showed Japan's inflation slowed for a sixth straight month in January -- dampened by weak consumer spending and falling energy prices -- its lowest level since May 2013.
Tokyo stocks edged up to a fresh 15-year high, despite profit-taking largely erasing earlier gains that were driven by the yen's fall.
The Nikkei 225 index at the Tokyo Stock Exchange ticked up 0.06%, or 12.15 points, to end at 18,797.94, while the Topix index of all first-section issues advanced 0.14%, or 2.17 points, to 1,523.85.
Seoul slipped 0.37% in cautious trading after a recent rally with the benchmark KOSPI closing down 7.28 points at 1,985.80. Sydney climbed 0.34%, closing up 20.3 points to 5,928.8.
The Hang Seng Index ended down 0.32%, or 78.77 points, to 24,823.29, while the benchmark Shanghai Composite Index added 0.36%, or 11.94 points, to 3,310.30.
European stock markets were steady at the start of trading on Friday, with London's benchmark FTSE 100 index dipping 0.01% to 6,949.25 points.
Frankfurt's DAX 30 edged up 0.09% to 11,337.11 points and the CAC 40 index in Paris inched down 0.1% to 4,905.77 compared with Thursday's close
Asian markets have been rife with speculation over when exactly this year the US central bank will start raising interest rates, with Fed Chair Janet Yellen pointing this week to there being no hurry to raise interest rates from near-zero.
"Given that inflation surprises have been negative around the world, anything above consensus is a sign for optimism and a sign for higher rates in the US," Deutsche Bank strategist Daniel Brehon told Bloomberg News.
Despite Tokyo's high-profile offensive on deflation, Japan's core consumer inflation, excluding volatile fresh food prices, came in at 2.2% year-on-year, down from 2.5% in December, with the rise in overall consumer prices standing at 2.4%.
The disappointing official price data challenges BoJ governor Haruhiko Kuroda's claims that inflation is on an uptrend, and boost the chances that the BoJ will unleash more stimulus to counter the downturn, which would tend to weaken the yen.
Kuroda, however, told a news conference Friday: "As the effects of the decline in crude oil prices on a year-on-year basis dissipate, the two percent inflation is likely to be achieved."
Meanwhile, Japanese factory production in January rose a faster-than-expected 4% on-month, growing for the second straight month.