AFP

Asian stocks edged higher at the open on Thursday, tracking gains on Wall Street as markets adjusted following a rout this week on higher-than-expected US inflation data.

The data showed US yearly inflation slowing less than expected and monthly inflation rising, stoking fears that the US Federal Reserve would continue its aggressive tightening of monetary policy.

On Thursday, bourses in Tokyo, Hong Kong and Seoul opened cautiously up.

Analysts said markets were rebounding from the steep losses that followed the inflation data, and to price in an expected 75 basis-point interest rate hike by the Fed at a meeting next week.

The release of US producer price data also affected market sentiment, showing producer costs dropping for the second straight month, mainly driven by falling US fuel prices.

“Stock markets have stabilised a little after Tuesday’s rout which saw risk assets pummelled across the board,” said Craig Erlam, senior market analyst at OANDA.

Tokyo — the previous day’s biggest loser in Asia — rebounded slightly on Thursday but investors remained wary of the speed and degree of future US rate hikes.

“Investors remain deeply cautious about potentially excessive monetary tightening in the United States”, Okasan Online Securities said in a note.

On Wednesday, Wall Street stocks rose as investors prepared for next week’s Fed decision, with the Dow rising 0.1 percent and the S&P 500 gaining 0.3 percent.

Any US interest rate hike tends to strengthen the dollar, and Asian currencies remain at risk from the strong greenback.

On Thursday, the Australian dollar traded near a two-year low, with the yen at near 143 to the US dollar.

A day earlier, Japan’s central bank conducted a “rate check” operation on the yen, a move seen as a precursor to possible intervention, and which served to bring the currency back from the 145 level that is widely seen as a threshold by the market.

– ‘Front-running’ predictions –

Global consumer prices have soared for months, exacerbated by Russia’s invasion of Ukraine — which has hiked energy and food costs — and because of supply chain strains and Covid lockdowns in China.

Analysts say markets have been trying to “front-run” predictions of when inflation will peak.

“There appears to have been a tendency in recent months to front-run certain releases in the hope that it’s going to prove to be the ‘pivot’ moment when everything starts to look up, central banks can ease off the brake and risk assets will have bottomed,” said OANDA’s Erlam.

All eyes are now firmly on the Fed’s meeting next week, where another 75 basis-point rise is widely expected, after two consecutive increases of the same size.

Following the US inflation data, however, some analysts said it could rise by a full percentage point.

Aggressive interest rate tightening by central banks is slowing down major economies, as authorities attempt to stop them from overheating and tame sharp price rises.

On Wednesday, UK inflation slowed to 9.9 percent in August, but remained close to 40-year highs.

The Bank of England is expected to institute another rate hike next week.

“(The UK inflation figure is) not exactly cause for celebration, nor is it likely the peak, but you have to take your wins where you can these days,” said Erlam.

“The data also won’t in all likelihood change the outcome of the BoE meeting next week, with 75 basis points now heavily backed but 50 also possible.”

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: UP 0.4 percent at 27,918.46  

Hong Kong – Hang Seng Index: UP 0.3 percent at 18,896.92

Shanghai – Composite: DOWN 0.6 percent at 3,218.07

New York – Dow: UP 0.1 percent to 31,135.09 points (close)

London – FTSE 100: DOWN 1.5 percent at 7,277.30 (close) 

Euro/dollar: UP at $0.9976 from $0.9972 

Pound/dollar: UP at $1.1534 from $1.1532  

Euro/pound: UP at 86.50 pence from 86.46 pence 

Dollar/yen: UP at 143.28 yen from 142.20 yen 

Brent North Sea crude: DOWN 0.1 percent at $93.99 per barrel

West Texas Intermediate: UP 0.02 percent at $88.50 per barrel

Every time we make a call on Zoom, upload a document to the cloud or stream a video, our computers connect to vast warehouses filled with servers to store or access data.

Not so long ago, European countries were falling over each other to welcome the firms that run these warehouses, known as data centres or bit barns.

Wide-eyed politicians trumpeted investments and dreamt of creating global tech hubs.

But then the dream went sour.

The sheer amount of energy and water needed to power and cool these server farms shocked the public.

The industry sucked up 14 percent of Ireland’s power last year, London warned home builders that power shortages caused by bit barns could affect new projects, and Amsterdam said it simply had no more room for the warehouses.

Then things got worse.

The war in Ukraine helped spark an energy crisis across the continent, leaving consumers facing rocketing bills and countries contemplating energy shortages.

“Data centres will be a target,” critical blogger Dwayne Monroe told AFP, saying the focus would only grow if Europe cannot fix its energy crisis.

Grassroots campaigns and local opposition have already helped to halt projects this year by Amazon in France, Google in Luxembourg and Meta in the Netherlands.

The Irish government, while reaffirming support for the industry, put strict limits on new developments until 2028.

The data industry says it feels unfairly targeted, stressing its efforts to source green energy and arguing that outsourcing storage to bit barns has helped slash consumption.

– ‘Veil of shadow’ –

These arguments are playing out most spectacularly in Ireland.

Activists are campaigning on a broad range of topics and using local forums to push their case.

“They take up a huge amount of space but provide basically no employment,” says Madeleine Johansson, a Dublin councillor for the People Before Profit party, which is campaigning on the issue.

Johansson recently had a motion passed in her council area banning the centres, sparking an almighty row with the national government that is yet to be resolved.

Dylan Murphy of Not Here, Not Anywhere, one of several climate groups pushing the issue in Ireland, has filed a motion in his local council in Fingal calling for companies to reveal the kind of information they are holding.

“There’s a complete lack of transparency… about what data is actually being stored in these data centres,” he said, calling it a “veil of shadow”. 

The data industry says revealing that information would be impossible.

Michael McCarthy of Cloud Infrastructure Ireland, a lobby group, said activists had lost the argument on sustainability and were now throwing everything at the wall. 

“Data centres definitely are large energy users but they’re part of a cohort of larger energy users,” he said.

McCarthy and industry figures in other countries say the real problem is years of underinvestment in national energy infrastructure. 

He also pointed out that the industry in Europe had pledged to become carbon neutral by 2030.

And there are still countries hankering to get data firms to locate there — particularly Iceland and Norway.

– Questions over metaverse –

Against this backdrop, the tech industry continues to innovate new products that invariably require vast amounts of processing power and data storage.

Machine-learning tools, for example, are hugely energy hungry — Google said earlier this year they accounted for between 10 and 15 percent of its total energy usage.

The metaverse, an emerging concept for a 3D internet championed by Facebook owner Meta, would also be hugely energy intensive. 

Critical blogger Monroe reckons the metaverse will buckle under its own weight, partly because of its data requirements.  

“The construction of the metaverse would require Facebook to build out a distribution of data centres that would rival what Amazon, Microsoft and Google have done for their clouds,” he said.

Meta did not respond directly to questions about the metaverse but told AFP that it was “proud to build some of the most energy and water efficient data centres in the world”.

As far as the carbon footprint of such innovation goes, energy experts interviewed by AFP said it would be difficult to assess.

The metaverse, for example, could help to reduce emissions in other areas by reducing the need for travel.

An energy official who did not want to be named questioned whether data centres were the best target for criticism when cryptocurrencies were so wasteful.

While data centres used about one percent of global energy output in 2020, cryptocurrency mining used about half that amount, according to the International Energy Agency.

McCarthy said those who opposed data centres needed to reckon with just how embedded they had become in everyday life, particularly since the coronavirus pandemic.

“They facilitate how we can work and live online, that’s the reality of it,” he said.

California filed a lawsuit Wednesday accusing Amazon of using its market influence to prevent merchants from offering buyers better deals elsewhere online, in violation of state antitrust law.

Amazon pressures merchants not to list items at lower prices on other websites, which hurts sellers and consumers, California Attorney General Rob Bonta said in the lawsuit.

“Amazon coerces merchants into agreements that keep prices artificially high, knowing full well that they can’t afford to say no,” Bonta said in a release.

“Many of the products we buy online would be cheaper if market forces were left unconstrained.”

The attorney general in Washington had filed a similar suit against Amazon, but a judge dismissed the case in March.

“Similar to the DC Attorney General — whose complaint was dismissed by the courts — the California Attorney General has it exactly backwards,” an Amazon spokesperson said in response to an AFP inquiry.

“The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.”

– Amazon dominance –

Amazon is such a dominant e-commerce site that merchants feel they have little choice when it comes to agreeing to the titan’s selling conditions, Bonta’s lawsuit argued.

Those demands include agreeing not to offer lower prices elsewhere, whether it be at Amazon rivals such as Walmart or a merchant’s own website, the suit said.

Vendors who don’t comply can see their listings made less prominent or even have their ability to sell items on Amazon suspended, according to the suit.

“Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively,” the spokesperson said, noting that sellers set their own prices for products at its website.

Sellers have reported that they could offer goods at lower prices on their own websites and some other e-commerce venues because they would save on fees charged by Amazon, state attorneys argued.

But “with other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases,” Bonta said.

“This perpetuates Amazon’s market dominance.”

Bonta is asking a state court in San Francisco to order Amazon to stop its price-floor practice and pay unspecified damages.

While it is true that some Amazon agreements with sellers preclude them from offering lower prices elsewhere online, such conditions are common in the retail industry and don’t stop merchants from lowering prices overall, GlobalData managing director Neil Saunders said in an analyst note.

“This, if anything, allows Amazon to protect its consumers by guaranteeing they are getting one of the best deals,” Saunders said.

“Amazon attracts a lot of scrutiny, but given the amount of competition it has injected into the retail market, it strains credulity to suggest the company has caused any serious harm to consumers.”

Unfortunately for Amazon, California has the resources to pour into the litigation, and it comes as Amazon sales are slowing, the analyst noted.

Seattle-based Amazon is also likely concerned that the California lawsuit is a prelude to federal antitrust action, Saunders said.

US regulators have ramped up their focus on the market power of tech giants, as the fate of legislation aimed at loosening their grip on markets remains undecided.

TikTok is serving up misinformation to users searching for news about politics, climate change, Covid-19, the war in Ukraine and more, according to a report released Wednesday.

Toxicity and false claims are a “significant threat” at TikTok, which is becoming a go-to online venue for young people to search for information, according to a study by NewsGuard, a media watchdog.

NewsGuard describes itself as a “journalism and technology tool” that rates the credibility of websites and online information.

“Even when TikTok’s search results yielded little to no misinformation, the results were often more polarizing than Google’s,” NewsGuard said of its findings.

NewsGuard in September analyzed the top 20 results from 27 TikTok searches on news topics, finding that 19.5 percent of the videos suggested contained false or misleading claims, the report stated.

Researchers said that they compared TikTok and Google results from searches for information about school shootings, abortion, Covid-19, US elections, Russia’s war on the Ukraine and other news.

False or misleading claims in results included conspiracy theories promoted by QAnon and supposed home recipes for hydroxychloroquine, a prescription drug used to treat malaria and lupus, according to NewsGuard.

TikTok says the methodology used in the analysis is flawed, and that it makes a priority of fighting misinformation.

“Our Community Guidelines make clear that we do not allow harmful misinformation, including medical misinformation, and we will remove it from the platform,” a TikTok spokesperson said in response to an AFP inquiry.

“We partner with credible voices to elevate authoritative content on topics related to public health, and partner with independent fact-checkers who help us to assess the accuracy of content.”

While testifying Wednesday at a Senate hearing on social media’s impact on national security, Twitter former senior vice president of engineering Alex Roetter said that the Chinese government is an investor in TikTok parent company Bytedance, and that it has incentives to maximize profit and user engagement.

“The TikTok algorithm pushes educational science, engineering, and math content on Chinese youth while pushing a feed containing twerking videos, misinformation, and other destructive content to US children,” Roetter told Senators.

Social media companies stand to benefit from attention-grabbing online content despite harmful effects it may have on society, Roetter said in opening remarks.

“Our terms of service and community guidelines are built to help ensure our vision of a safe and authentic experience,” TikTok chief operating officer Vanessa Pappas said at the hearing.

“Our policies have zero tolerance for disinformation, violent extremism and hateful behavior.”