Asian Market Update: Japanese data reinforces view of gradual BoJ rate hikes - Japanese inflation data reinforces expectations of gradual BoJ rate hikes: Japanese core CPI increased 0.1% mnth/mnnth (in line with estimates) and annual core CPI came in at 0.0% v 0.0% expected. Traders focused on Tokyo CPI coming in softer than expected. Given a moderation in the Tokyo area CPI and a relatively higher weighting of gasoline prices in the national data, the risk that the national CPI will mark a year-on-year fall soon has increased substantially. - Japanese labor market improves, but wage inflation remains low: The Jan Japanese jobless rate came in better than expected (4.0% v 4.1%e) but wage inflation disappointed yen bulls (JAN LABOR CASH EARNINGS YOY: -1.4% V 0.2%E (Largest drop since June); OVERTIME EARNINGS: -0.7% V 2.4% PRIOR). Japanese overtime pay declined for the first time in 54mnths during January. Separate data showed a strong surge in household spending (JAN OVERALL HOUSEHOLD SPENDING YOY: 0.6% V -0.3%E), but markets largely ignored the release (some view the household spending data as flawed due to bad sampling). - Aussie retail sales surge: January Aussie retail sales came in much better than expected (JAN RETAIL SALES: 0.9% V 0.5%E), leading to brief AUD/USD gains. Aussie gains were capped due to the uncertain outlook for commodities. Some also pointed out that Aussie retail sales don't look all that inflationary when averaging the December and January results. In other Aussie data, the current account came in worse than expected (Q4 CURRENT ACCOUNT BALANCE: -15.1B V -14.0BE), and the Australian Bureau of Statistics said net exports likely subtracted a hefty 1.3 percentage points from GDP in the Q4. - Asian Equities: The Nikkei 225 is currently down by about 1.0%, lower for the 4th consecutive session. Losses on the Nikkei continue to be dominated by exporters due to the stronger yen and threat of a US economic slowdown. Shares of retailers are gaining following household consumption rising for the first time in 1yr. The Nikkei is set for its worst performing week in 8 months. The ASX 200 index is little changed in cautious trade. Macquarie Bank gained sharply following an upgrading to its profit forecast. South Korea's KOSPI index is currently little changed as gains in shares of Posco Steel offset losses in shares of LG Electronics. Chinese A-shares are currently higher by more than 1.5% as shares gained on bargain hunting. The Hang Seng is also higher on bargain hunting and managed to end a 5 session losing streak. Gains on the Hang Seng were driven by shares of China Mobile. Taiwan's Taiex is little changed following sharp declines during the prior session. - Commodities: Crude oil is lower and just below the $62 level. The stock market's recent weakness is certainly making traders question how strong forward demand of oil will be, and trading has been tight during Asia. Tokyo Gold opened down by its daily limit and is near a one-month low as the Yen is set for its best weekly gain in 14 months. Shanghai copper is lower and is set to close the week lower on concerns that US and Chinese demand for the metal will slow.