{"id":73470,"date":"2026-10-22T22:38:18","date_gmt":"2026-10-23T02:38:18","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/asian-markets-diverge-japans-inflation-accelerates-as-chinese-stocks-enter-bear-market\/73470\/"},"modified":"2026-10-22T22:38:18","modified_gmt":"2026-10-23T02:38:18","slug":"asian-markets-diverge-japans-inflation-accelerates-as-chinese-stocks-enter-bear-market","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/asian-markets-diverge-japans-inflation-accelerates-as-chinese-stocks-enter-bear-market\/73470\/","title":{"rendered":"Asian Markets Diverge: Japan\u2019s Inflation Accelerates as Chinese Stocks Enter Bear Market"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Japan&#39;s core inflation rose to 2.1% in September<\/strong>, exceeding the <strong>Bank of Japan&#39;s (BOJ)<\/strong> 2% target for the first time in nine months and strengthening the case for a December interest rate hike.<\/li>\n<li><strong>Chinese stocks officially entered a technical bear market<\/strong>, with the <strong>Shanghai Composite Index<\/strong> and <strong>CSI 300<\/strong> falling more than <strong>20%<\/strong> from their recent peaks amid a massive sell-off in artificial intelligence (AI) shares.<\/li>\n<li><strong>The Jakarta Composite Index (JCI)<\/strong> remained highly volatile, rising <strong>0.3% to 5,402.967<\/strong> in early trade as investors weighed potential <strong>MSCI<\/strong> reclassification risks against domestic liquidity support.<\/li>\n<li><strong>Global energy pressures and a weak Yen<\/strong> continue to drive cost-push inflation in Japan, while Chinese markets suffer from a lack of broad-based fiscal stimulus.<\/li>\n<\/ul>\n<h2>Japan\u2019s Inflation Surge Pressures Bank of Japan<\/h2>\n<p>Japan\u2019s annual <strong>core consumer price index (CPI)<\/strong>, which excludes fresh food, climbed <strong>2.1%<\/strong> in September, up from <strong>1.7%<\/strong> in August. This acceleration was driven by rising energy costs linked to Middle East tensions and a persistent weakness in the <strong>Japanese Yen<\/strong>, which has inflated the cost of imported goods.<\/p>\n<p>While the Bank of Japan (<a href=\"\/stock\/8301\">8301<\/a>) is expected to maintain its current interest rate at <strong>1.25%<\/strong> during next week&#39;s policy meeting, analysts suggest the new data &quot;cements&quot; the path for a hike in December. Services inflation also ticked up to <strong>1.5%<\/strong>, signaling that higher labor costs are beginning to filter through the broader economy, a key metric for Governor Kazuo Ueda\u2019s &quot;virtuous cycle&quot; of wages and prices.<\/p>\n<h2>Chinese Markets Sink into Bear Territory<\/h2>\n<p>The <strong>Shanghai Composite Index<\/strong> fell more than <strong>2%<\/strong> in early Friday trading, extending a brutal slide that has seen Chinese equities lose roughly <strong>$2.4 trillion<\/strong> in market value since May. The <strong>CSI 300 Index<\/strong> closed Thursday at a 15-month low, confirming a technical bear market after dropping <strong>20.2%<\/strong> from its June peak.<\/p>\n<p>Investor sentiment has soured as initial optimism over AI-driven growth and government stimulus measures faded. Tech giants like Alibaba (<a href=\"\/stock\/BABA\">BABA<\/a>) and Tencent (<a href=\"\/stock\/TCEHY\">TCEHY<\/a>) have faced renewed pressure as consumption remains sluggish and doubts grow over the immediate profitability of heavy AI investments.<\/p>\n<h2>Volatility Persists in Southeast Asia<\/h2>\n<p>In Indonesia, the <strong>Jakarta Composite Index (JCI)<\/strong> showed signs of a fragile recovery, rising <strong>0.3%<\/strong> to <strong>5,402.967<\/strong> following a period of extreme turbulence. The market has been rocked by reports that <strong>MSCI<\/strong> is considering downgrading Indonesia to &quot;standalone market&quot; status due to concerns over transparency and market accessibility.<\/p>\n<p>Despite the early gain, the index remains under pressure from significant foreign capital outflows, which have reached nearly <strong>Rp 118 trillion<\/strong> year-to-date. Investors are closely watching <strong>Bank Indonesia<\/strong> for further liquidity measures to stabilize the domestic exchange as the market tests critical support levels near <strong>5,300<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Japan&#39;s core inflation rose to 2.1% in September, exceeding the Bank of Japan&#39;s (BOJ) 2% target for the 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