Japanese consumer prices rise but stocks fall; markets at risk from Fed exit

A report on Friday showed that Japan's consumer prices excluding fresh food rose 0.4 percent in June, the first increase in 14 months.

Japanese stocks, however, fell on Friday. The Nikkei 225 slid 3.0 percent to a near three-week low as the yen rose.

Stocks elsewhere mostly shrugged off the losses in Japan though. The STOXX Europe 600 fell 0.2 percent while the S&P 500 rose 0.1 percent.

Helping to boost US stocks on Friday was a report showing that the Thomson Reuters/University of Michigan consumer sentiment index rose to 85.1 in July, the highest level in six years, from 84.1 in June.

However, the International Monetary Fund warned in a report on Friday that the Federal Reserve’s exit from its asset purchase programme could trigger “excessive” interest-rate volatility. This in turn could have “adverse global implications”.

The IMF left its US growth forecast for this year unchanged at 1.7 percent.