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Asia stocks edge higher, recession and inflation fears check gains
CGTN
The Tokyo Stock Exchange in Tokyo, Japan. /CFP

The Tokyo Stock Exchange in Tokyo, Japan. /CFP

Asian shares inched up on Tuesday morning as positive economic data and hints of easing Sino-U.S. tensions offered some respite to the recent sell-offs, though persistent fears about a global recession and sky-high inflation kept most buyers at bay.

MSCI's gauge of Asia Pacific stocks outside Japan was up 0.3 percent, having erased part of the early morning gains.

The index has fallen 16 percent so far this year, as worries that central banks around the world will push economies into recession to break red-hot inflation have sent investors running for cover.

Offering brief respite to nervous markets was a report that U.S. President Joe Biden was leaning towards a decision on easing tariffs on goods from China as well as news Chinese Vice Premier Liu He had spoken to U.S. Treasury Secretary Janet Yellen, said Redmond Wong, market strategist at Saxo Markets Hong Kong.

A survey showing China's services activity grew at the fastest pace in almost a year also helped the sentiment, he said.

There was also positive data from Japan where the country's services sector activity expanded at the fastest pace in over eight years in June as the easing of COVID-19 curbs boosted sentiment among businesses such as tourism, helping the Nikkei to rise 0.8 percent.

Referring to the global growth and inflation dynamics, Saxo Markets' Wong said, "Market participants are still assessing the impact of the tug of war between inflation being at persistently elevated levels and signs pointing to potentially an incoming U.S. recession."

Those concerns were front and center in South Korea, where June inflation accelerated to the fastest pace since the Asian financial crisis, fanning expectations the central bank could deliver a 50 basis point rake hike for the first time next week to cool prices.

(With input from Reuters)

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