Markets were also on alert for signs of Japanese authorities intervening in the yen after further declines in the currency.
Stocks fell and bond yields rose in Asian trading as investors grew nervous following surprise increases in inflation data from Australia on Wednesday and Canada on Tuesday.
At 0811 GMT, the MSCI World Equity index was down 0.1%.
The pan-European STOXX 600 index was up less than 0.1%, stabilizing after two days of decline.
London’s FTSE 100 was a little lower, but Germany’s DAX was up 0.2%.
Traders are awaiting Friday’s U.S. personal consumption expenditures (PCE) data, which is the U.S. Federal Reserve’s preferred measure of inflation and could help traders determine the outlook for the Fed’s interest rates. Fed.
France, Italy and Spain will also release inflation data on Friday.
Fiona Cincotta, senior market analyst at City Index, said markets were cautious.
“No one is really going to want to take big positions ahead of tomorrow’s inflation data,” she said.
“In Europe, political uncertainty is also limiting any increase before the French elections,” she added.
The first round of the French legislative elections will take place on Sunday.
Euro zone government bond yields rose to their highest level in two weeks. The German benchmark 10-year yield rose 3 basis points to 2.476%.
The risk premium on French debt was near its highest level in seven years, as markets worried about the risk of far-right or far-left parties winning elections.
U.S. Treasury yields were also higher, with the 10-year Treasury yield rising 3 basis points to 4.3411%.
Expectations for interest rate cuts in the United States have been pushed back by persistent inflation and strong economic data. U.S. job claims data is expected later in the session.
If jobless claims are lower than expected, that could really add fuel to the Fed’s decision to not cut rates this year,” said Mr. Cincotta of City Index.
Elsewhere, euro zone bank lending data showed lending remained near multi-year lows.
YEN MONITORING
The Japanese yen is near a 38-year low against the U.S. dollar, keeping markets on alert for any signs of intervention.
The dollar-yen pair was trading at 160.57, with the yen having strengthened slightly since Thursday’s peak of 160.88.
Japanese Finance Minister Shunichi Suzuki said he would take any necessary action regarding currencies and that Japanese authorities were “deeply concerned” about the effect of the falling yen on the economy.
ING said in a note that authorities may be prompted to wait for Friday’s U.S. PCE data before taking action.
“If US data fuels greater dollar strength, then intervention would become almost inevitable, but with a new line in the sand potentially closer to 165,” wrote Francesco Pesole, ING FX strategist.
The U.S. dollar index was a little lower on the day at 106. The euro was up less than 0.1% at $1.0685.
The Swedish crown weakened after the Swedish central bank kept its key interest rate at 3.75% as expected and said it could cut rates two or three times in the second half of the year. year, if the inflation outlook remains the same.
Oil prices edged higher, with Brent oil futures up 0.5% at $85.65 a barrel. U.S. West Texas Intermediate crude futures were up 0.4% at $81.26 a barrel.
Gold was up 0.2% at $22,303.3.
