HONG KONG, Aug 10, 2022 (BSS/AFP) - Asian equities fell Wednesday, tracking a
drop on Wall Street ahead of a crucial US inflation report later in the day,
which could have a huge bearing on the Federal Reserve's plans for raising
interest rates.

Investors are preparing for the consumer price figures with a sense of dread
as analysts warn a forecast-beating reading would ramp up bets on another big
Federal Reserve hike and reinforce recession expectations.

The US central bank has said its decision on when and by how much to tighten
monetary policy will be driven by data as it struggles to walk a fine line
between bringing inflation down from four-decade highs and trying not to
damage the economy.

There had been hope that recent indicators showing activity slowing would
give the Fed room to be less hawkish. But a bigger-than-predicted jump in
jobs last month revived talk of a third straight three-quarter-point hike in
September.

"The (Fed policy board) will need to make sure inflation moves back towards
target sustainably before contemplating pausing its tightening cycle," Carol
Kong, of Commonwealth Bank of Australia, said.

"A strong inflation outcome today will likely reinforce the (board) is still
some way away from that point yet, and see markets readjust higher their
expectations for US interest rates."

Wednesday's figures come at a sensitive time for world markets, which have
been buffeted by a range of other issues including the war in Ukraine, supply
chain snarls and rising China-US tensions over Taiwan.

While the latest earning season has been less painful than feared, there are
increasing signs that the economic slowdown is beginning to impact companies,
with some major firms -- including Apple and Amazon -- providing downbeat
outlooks.

Chip-maker Micron became the latest, saying revenue would likely come in at
the low end of its forecasts in the fourth quarter owing to weak demand. That
came a day after rival Nvidia unveiled disappointing results.

Tech firms led losses in New York, with the Nasdaq off more than one percent,
and they did so in early Asian trade.

Hong Kong, Shanghai, Tokyo, Sydney, Seoul, Wellington, Taipei, Manila and
Jakarta were all well down.

There was little initial reaction to news that China's consumer price index
rose last month to a two-year high but came in below expectations.

Oil prices were flat but remained around six-month lows, even after news that
supplies from Russia to three European countries through Ukraine had been
halted as sanctions prohibited the processing of the transit payment.

The cost of the commodity has essentially wiped out all the gains seen since
Russia's invasion of its neighbour in February as expectations of a recession
hit demand forecasts, while consumers are put off buying petrol owing to
rising prices.

But OANDA's Edward Moya said the market would not likely weaken further.

"Whatever crude demand destruction that occurs from a weakening global
economy won't be able to drag down oil prices much lower given how low the
supply outlook remains," he said in a note.

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.8 percent at 27,767.07 (break)

Hong Kong - Hang Seng Index: DOWN 1.6 percent at 19,687.72

Shanghai - Composite: DOWN 0.4 percent at 3,233.24

Euro/dollar: UP at $1.0215 from $1.0213 Tuesday

Pound/dollar: UP at $1.2081 from $1.2071

Euro/pound: DOWN at 84.55 pence from 84.57 pence

Dollar/yen: DOWN at 135.06 yen from 135.12 yen

West Texas Intermediate: DOWN 0.1 percent at $90.45 per barrel

Brent North Sea crude: UP 0.1 percent at $96.39 per barrel

New York - Dow: DOWN 0.2 percent at 32,774.41 (close)

London - FTSE 100: UP 0.1 percent at 7,488.15 (close)