* Australia Q3 inflation higher than expected
* Extends trend seen in New Zealand, China and Japan
* Singapore central bank warns of higher inflation
* Malaysia next to report CPI, Japan later in the week
(Updates with Singapore Sept CPI, central bank's comments)
By Ian Chua and Kevin Lim
SYDNEY/SINGAPORE, Oct 23 Inflation in Australia
quickened in the September quarter, the latest in the Asia
Pacific region to show a pick-up in price pressures that could
limit the scope for policymakers to inject more stimulus if
Australia's quarterly headline inflation sped up to 1.2
percent in the third quarter from 0.4 percent in the second,
data from the Australian Bureau of Statistics showed on
Wednesday, reflecting in part a spike in fuel prices.
The outsized quarterly move jolted markets, sending the
Australian dollar to a 4-1/2-month high and prompting markets to
trim chances of another interest rate cut this year.
Australia's data came a week after neighbouring New Zealand,
India and China all reported higher-than-expected inflation.
Singapore's consumer prices in September rose 1.6 percent
from a year earlier, below forecasts, but the central bank
warned that core inflation was expected to rise over the next
The city-state's core inflation measure excludes housing
rents as well as the price of motor vehicles as these are
determined primarily by government policies.
"The pass-through of domestic costs to prices of consumer
services could intensify as a result of the rising cost
pressures that firms are facing from business rentals, COE
premiums for commercial vehicles, and labour costs," the
Monetary Authority of Singapore (MAS) said in a statement.
Singapore uses certificates of entitlement (COEs) to control the
number of vehicles on its roads.
Selena Ling, head of treasury research at Oversea-Chinese
Banking Corp, Singapore's number two lender, said there was an
"upward creep" in inflation across the region. Domestic demand
remains strong in most Asian countries, while possible further
cuts in fuel subsidies by the Malaysian and Indonesian
governments will also push price levels higher.
"But we are starting from a generally low point, which is
why a lot of central banks are willing to stand on the sidelines
One potential threat for Asia's inflation outlook,
particularly the region's emerging economies, could come early
next year when expectations for the Federal Reserve to scale
back stimulus return to the fore.
That could see a repeat of this year's sell-off in emerging
assets that drove currencies such as the Indonesian rupiah to
multi-year or even record lows. A development that could sit
uncomfortably with inflation hawks.
While the quarterly jump in Australia's inflation caught the
market's attention, the annual inflation rate for both
underlying and headline measures were still comfortably within
the Reserve Bank of Australia's (RBA) 2-3 percent target band.
"The RBA pausing for many months to come makes the most
sense at this juncture," said Annette Beacher, head of
Asia-Pacific Research at TDSecurities in Singapore.
Later in the week, Japan will release its inflation numbers
but it is probably the only country in Asia happy to see some
price pressure, having unleashed a potent mix of fiscal and
monetary stimulus known as "Abenomics" to end 15-years of
Japan's core consumer prices, which exclude prices of fresh
food but include oil products, probably rose 0.7 percent in
September from a year earlier.
That would mark the fourth straight month of positive
readings, keeping the annual growth rate near a five-year high
of 0.8 percent seen in August.
(Editing by Jacqueline Wong)