employees of the foreign exchange trading company gaitamecom work in front of a monitor showing the japanese yen exchange rate against the us dollar at its dealing room in tokyo japan june 22 2022 reutersissei kato hong kong july 14 reuters  asian shares struggled on thursday and the safe haven dollar was strong as white hot us inflation data drove fear the federal reserve will raise interest rates even more aggressively to slow price increases potentially sending the economy into recession mscis broadest index of asiapacific shares outside japan miapj0000pus lost 01 hovering just above the twoyear low hit on tuesday while us nasdaq futures shed 03 japans nikkei n225 bucked the trend by rising 06 helped by the yens weakness against the dollar boosting exporters overnight us data showed rising costs of fuel food and rent drove the consumer price index cpi up 91 last month leading to worries that the fed could raise rates by an enormous 100 basis points at its meeting next month rather than the 75 that had been expected read more the concerning aspect in the cpi numbers was the breadth of increases said shane oliver chief economist at amp who said nearly 90 of the us cpi components saw increases of more than 3 market pricing on the cmes fedwatch tool currently indicates a 78 chance of a 100 basis increase though oliver said this could be a kneejerk reaction to the high cpi reading i personally think the fed will stick to 75  which is still a high number  if they go to 100 it will look like they are panicking only time will tell though the fed does have an unconditional commitment to get inflation back down us twoyear yields  which reflect interest rate expectations were last at 3121 just off an overnight fourweek high increasing their lead on us benchmark 10 year yields which were at 29558 socalled yield curve inversion when shortdated interest rates are higher than longer ones is commonly seen as an indicator of a recession and the gap between the two touched 25 basis points in early asia this also is bad news for asian economies and stocks carlos casanova senior economist at ubp said a recession in the us would mean less demand for asian exports with investors turning more risk off and moving money out of emerging markets and forcing asian central banks to raise rates themselves to avoid too currency depreciation so far bank of korea and the reserve bank of new zealand seem to be competing with each other to see who can be the most hawkish but all the other central banks are lagging we will see more rate hikes in asia which will lead to a deceleration in aggregate demand credit growth consumption and the like singapores central bank also tightened its monetary policy on thursday in an offcycle move hoping to slow inflation sending the local currency up 07 elsewhere in currency markets the euro was hovering back just above parity with the dollar at 100155 it briefly dipped to 09998 overnight breaking below 1 for the first time since december 2002 the european central bank faces a dilemma of whether to let the currency fall further pushing up already record high inflation or fighting back with more rapid interest rate hikes increasing the damage to an economy already hit hard by high energy costs read more the dollar was also firm against other majors rising over 138 yen for the fist time since september 1998  the dollar index  which tracks the currency against six majors was holding firm at 10845 brent crude futures for september fell 01 to 9949 and us west texas intermediate crude lost 015 to 9617 gold faced heavy selling pressure as higher rates hurt the noninterestbearing asset the spot price was down 05 at 1725 an ounce