Asian Shares Gain As U.S. Inflation Data Underpins Fed Pause Bets


Asian stocks rose broadly on Thursday after a highly anticipated U.S. inflation report did little to alter market expectations for the path of rate hikes.

Fed funds futures currently imply no chance of a rate hike next week and about a 45 percent chance of another hike by year’s end.

The dollar retreated and the euro advanced ahead of a European Central Bank meeting later today, with the central bank expected to announce another increase in interest rates to tackle inflation across the euro zone.

Gold was a tad lower in Asian trading and regional bond yields dropped in response to U.S. Treasuries following the release of U.S. inflation data, while oil prices rose about 1 percent after settling lower on Wednesday.

Chinese stocks ended slightly higher despite the European Union launching an anti-subsidy investigation into electric vehicles coming from China.

The Shanghai Composite Index edged up 0.1 percent to 3,126.55, while Hong Kong’s Hang Seng Index rose 0.2 percent to 18,047.92.

Japanese shares rallied after overnight data showed underlying U.S. inflation remained on a downward trajectory.

Investors shrugged off government data showing that Japan’s core machinery orders fell more than expected in July in the face of sluggish global growth and weakness in major market China.

The Nikkei average jumped 1.4 percent to 33,168.10, marking a one-week high. The broader Topix Index closed 1.1 percent higher at 2,405.57, with heavyweight Fast Retailing and technology stocks leading the surge. Advantest and Tokyo Electron jumped 2-3 percent.

H.I.S. plunged 7.2 percent after the travel agent reported a 5.6-billion-yen ($38.06 million) net loss for the nine months through July.

Seoul stocks posted strong gains to hit over one-week highs, with Samsung Electronics, Naver, LG Energy Solution and SK Hynix climbing 1-3 percent.

Leading pharmaceutical firm SK Biopharm soared 6.9 percent. The Kospi surged 1.5 percent to 2,572.89, touching the highest since September 5.

Australian markets advanced after data showed a surge in employment in August. The report revealed 65,000 more Australians had a job in the month.

The benchmark S&P ASX 200 Index rose 0.5 percent to 7,186.50, while the broader All Ordinaries Index settled half a percent higher at 7,382.70.

Across the Tasman, New Zealand’s benchmark S&P NZX-50 Index ended down 0.4 percent at 11,313.53.

U.S. stocks ended mixed overnight as the release of the August inflation report kept bets of one more Fed rate hike alive.

Data showed consumer prices increased 3.7 percent year-per-year last month, slightly ahead of the estimated 3.6 percent. Core inflation rose 4.3 percent, matching expectations.

The Dow slipped 0.2 percent, while the S&P 500 inched up 0.1 percent and the tech-heavy Nasdaq Composite added 0.3 percent.

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