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Stock market today: Asian stocks mostly higher ahead of US inflation report

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Asian stocks were mostly higher on Tuesday as investors awaited an update on U.S. consumer prices.

Japan's benchmark Nikkei 225 gained 2.9% to 37,961.48. Australia's S&P/ASX 200 gave up earlier gains, falling 0.2% to 7,603.60. South Korea's Kospi rose 1% to 2,647.03.

Markets in China, Hong Kong and Taiwan were closed for the Lunar New Year.

Japan's producer price index data showed a 0.2% increase year-on-year but remained unchanged month-on-month. This could ease pressure on the central bank to change its long-standing ultra-loose monetary policy and raise its key interest rate from minus 0.1%.

“The modest numbers may still suggest a limited impact on consumer prices and may provide scope for the Bank of Japan to remain on a wait-and-see basis for now,” Yeap Jun Rong, market analyst at IG, said in a report.

The next big event for markets could be Tuesday's U.S. inflation update, with economists expecting it to fall back below 3%.

On Monday, Wall Street remained relatively stable after its last record week. The S&P 500 slipped 0.1% to 5,021.84 after closing above the 5,000 point mark for the first time on Friday.

Most stocks in the index rose, but losses from Microsoft and other technology companies weighed on the index.

Weakness in technology also sent the Nasdaq composite down 0.3% to 15,942.55. It had previously hovered just above its 2021 all-time high. The Dow Jones Industrial Average, meanwhile, rose 0.3% to 38,797.38, setting its latest record.

Conditions on the markets were calm and yields on the bond market were also stable.

Concerns about how top-heavy the stock market has become have grown as the seven largest companies accounted for a disproportionate share of the S&P 500's rise to record levels. If other companies alongside the group known as the Magnificent Seven can achieve strong profit growth, it could ease criticism that the market has become too expensive.

Another concern for the market has been uncertainty about how much of a threat to the economy posed by banks' loans and other holdings on their balance sheets tied to commercial real estate.

This is why there has been so much focus on New York Community Bancorp lately. The company shocked investors two weeks ago when it announced a surprise loss for its most recent quarter. Part of the problems stemmed from its acquisition of Signature Bank during the industry's mini-crisis last year. But concerns about commercial real estate also played a role.

New York Community Bancorp shares have roughly halved since that surprise report, but remained slightly more stable Monday. It fell slightly by 0.2%.

An index that measures stock prices across the regional banking sector rose 1.8%.

Yields on the bond market barely moved. The yield on the 10-year Treasury note fell to 4.16% from 4.18% late Friday.

The two-year Treasury yield, more in line with Federal Reserve expectations, remained at 4.48% late Friday.

Inflation has cooled so much that the Federal Reserve has indicated it could cut its key interest rate several times this year. Such cuts typically weigh on financial markets and the economy and would ease pressure that has built up since the Fed raised interest rates to their highest level since 2001.

After previously hoping that rate cuts could begin as early as March, traders have now pushed back their forecasts to May or June. Reports showing that the U.S. economy and labor market remain remarkably strong, as well as some comments from Fed officials, have led to delays.

In energy trading, benchmark U.S. crude oil rose 12 cents to $77.04 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 8 cents to $82.08 a barrel.

In foreign exchange trading, the US dollar rose to 149.55 Japanese yen from 149.34 yen. The euro was at $1.0771, down from $1.0774.

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