Japan Stocks Plunge More Than 3% After Wall Street Tumbles on US Inflation

Tokyo's Nikkei index fell more than 3% in trading after major Wall Street benchmarks slid across the board on higher-than-expected US inflation data.

The US consumer price index (CPI) report showed a stronger increase than forecast, heightening concerns that the Federal Reserve will keep interest rates elevated or tighten monetary policy further.

The move triggered broad selling of stocks, hitting Asian markets including Japan. The Nikkei's drop of more than 3% reflected investor caution over the outlook for interest rates and global economic growth.

Markets are closely watching for further signals from the Fed as well as developments in the US economy to shape investment strategy in the period ahead.