The US consumer price index rose 3.4 percent from a year earlier and 0.4 percent from the previous month in August, data released on Sept. 11 showed. Both figures matched market expectations.

The problem lay in core inflation. Core CPI excluding food and energy rose 0.3 percent month on month, above the 0.2 percent forecast, read as a signal that underlying inflation stripped of volatile items remains sticky.

Immediately after the release, market-implied odds of a Fed rate increase next week climbed as high as 90 percent. Fed funds futures priced the probability of a hike at the coming meeting at about 69 percent.

Fed Chair Kevin Warsh has recently stressed that if inflation does not improve, 'we have work to do,' emphasizing his commitment to returning inflation to the 2 percent target. Markets are reading that alongside the latest data.

A rate increase runs counter to an easing cycle and has immediate effects on asset markets. When Treasury yields rise, emerging market currencies wobble with them, and the won and the Taiwan dollar are not exempt.

For Korean and Taiwanese companies this transmits into funding costs. Terms for dollar-denominated bond issuance worsen and floating-rate borrowing costs rise, while exchange rates can cushion export price competitiveness.

European equities recovered losses, weighting the fact that the headline matched forecasts. The same data drew divergent readings across markets.

The real question is next week's decision together with the dot plot published alongside it. Whether this is a one-off increase or the start of a signaled path of successive hikes will largely determine how far markets move.