Asia's markets decline due to concerns about inflation, but China gains momentum from further stimulus

Due to ongoing worries that major central banks will be forced to maintain high interest rates for an extended period of time due to sticky inflation, the majority of Asian equities slumped on Wednesday.

China's markets showed some exceptions, rising little on the announcement of more steps by the government to bolster the struggling real estate industry.

Regional stocks followed Wall Street's mediocre overnight lead, which was mostly driven by a surge in NVIDIA, which helped the NASDAQ to all-time highs.

Beyond technology, however, U.S. equities generally were lower ahead of important inflation data that is expected later this week. Additionally, Federal Reserve officials continued their hawkish remarks on interest rates.

With a 1% decline, Australia's ASX 200 index was among the worst-performing in Asia following the release of stronger-than-expected consumer price index inflation data for April.

The data raised fears about a more hawkish Reserve Bank of Australia and signalled a rise in inflation for the second consecutive month.

In an effort to reduce inflation, the RBA may be forced to maintain high interest rates for longer or maybe raise them further this year because to sticky inflation.

Over in Japan, the TOPIX index shed 0.5% while the Nikkei 225 index dipped 0.3%.

Adachi Seiji, a member of the Bank of Japan, issued a warning, stating that sharp drops in the value of the yen may lead to the central bank tightening policy, particularly if it affected inflation.

Adachi also predicted that the BOJ would progressively discontinue its stimulus asset purchase programmes and that inflation would build up in the summer-autumn season.

However, he cautioned against rapid interest rate rises due to the dangers to Japan's economy and emphasised the importance of maintaining an accommodating stance in the short term.

Broader Asian equities fell as well, dampening optimism with expectations of additional indications about U.S. inflation and interest rates.

(Sources: investing.com, reuters.com)