European stocks and US futures fell in morning trade on Friday as inflation data stirred concerns that eurozone interest rates would have to increase further to stave off price rises.

The pan-European Stoxx 600 was down 0.3 per cent while Germany’s Dax dropped 0.4 per cent. France’s Cac 40, up 13 per cent in the year to date, lost 0.8 per cent as French inflation in April accelerated more than economists had expected, ramping up pressure on the European Central Bank to maintain the pace of interest rate rises when it meets next week.

Analysts polled by Reuters expect the ECB to raise rates by 0.25 percentage points to 3.75 per cent, yet “any upside surprise [in inflation figures] would keep the pressure up to stick with the faster hikes”, said Henry Allen, macro strategist at Deutsche Bank.

Japanese stocks stood out, hitting an eight-month high after Bank of Japan governor Kazuo Ueda announced a review of the central bank’s ultra-loose monetary policy, opting against an immediate change of tack. The Nikkei rose 1.4 per cent to its highest level since late August, with all sectors bar basic materials in positive territory.

Selling on European markets deepened after economic data showed eurozone gross domestic product rose 1.3 per cent year on year in the first quarter, down from 1.8 per cent in the final three months of 2022 and slightly below analysts’ expectations of a 1.4 per cent increase.

In the US, contracts tracking Wall Street’s benchmark S&P 500 fell 0.4 per cent and those tracking the tech-heavy Nasdaq 100 shed 0.3 per cent ahead of the New York open.

The falls come a day after the S&P 500 index clocked its biggest daily gain since January 6 on the back of strong earnings results from Meta, Microsoft and Alphabet. Shares in Amazon slipped 2 per cent in pre-market trading after the group said growth had slowed this month in its Amazon Web Services cloud division.

Other Asian stocks also advanced, with China’s CSI index up 1 per cent and Hong Kong’s Hang Seng index gaining 0.5 per cent.

The yen fell as much as 1.3 per cent to ¥135.74 per dollar, its lowest level since early March, following Ueda’s first policy board meeting, with overnight interest rates held at minus 0.1 per cent and its yield curve control policy unchanged for now.

The BoJ dropped a part of its forward guidance on rates, however, suggesting “an adjustment in policy comes earlier”, said analysts at ING, with speculation likely to build ahead of the central bank’s June meeting.

US government bonds rallied a day after fresh data showed GDP slowed more than expected in the first quarter of the year. The yield on interest rate sensitive two-year Treasuries fell 0.05 percentage points to 4.04 per cent. Yields move inversely to prices.

A measure of the dollar against six other currencies added 0.5 per cent.