Asian stocks rallied on Thursday after a cooler-than-expected US inflation report fuelled optimism for a turnaround in interest rates soon.
US data on Wednesday showed its consumer price index (CPI) rose by 0.3% in April, below an expected 0.4% gain, raising hopes the Fed can cut rates by 50 basis points this year, with the first quarter-point reduction already priced in for September.
Japan’s Nikkei share average charged ahead as technology stocks tracked their overseas peers higher on bets US inflation will resume its downward trend.
Also on AF: Chinese Firms Close in on High-End AI Memory Chips Coup
The Nikkei share average was up 1.39%, or 534.53 points, to close at 38,920.26, while the broader Topix was ahead 0.24%, or 6.66 points, to 2,737.54.
The yen’s appreciation following the US CPI report, however, weighed on export-related shares including index heavyweight Toyota Motor, which tend to benefit from a softer yen.
Still, as the yen has spiralled to its weakest in 34 years, the risk of currency intervention has kept investors on alert, and a rise in Japanese government yields also weighed.
Chinese stocks rose, led by property and financial shares, as sentiment improved after several major cities lifted home purchasing restrictions.
Hong Kong shares were also up. Property shares continued the rally, after reports that China is also considering a plan for local governments nationwide to buy millions of unsold homes.
The CSI 300 real estate index and mainland property developers traded in Hong Kong jumped 3.6% and 5.7%, respectively.
China’s blue-chip CSI300 index was up 0.39% with, earlier in the session, its financial sector sub-index higher by 1.67%, the consumer staples sector up 0.82%, the real estate index up 3.59% and the healthcare sub-index up 0.41%.
The Shanghai Composite Index rose 0.08%, or 2.50 points, to 3,122.40, while the Shenzhen Composite Index on China’s second exchange advanced 0.29%, or 5.13 points, to 1,764.71.
Chinese H-shares listed in Hong Kong – stocks belonging to companies from the Chinese mainland – rose 1.82% to 6,864.35, while the Hang Seng Index was up 1.59%, or 302.82 points, at 19,376.53.
Dollar Index at 5-Week Low
Elsewhere across the region, in earlier trade, Sydney, Singapore, Seoul, Mumbai, Wellington, Taipei, Manila and Jakarta were also well in the green. MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.5%.
The dollar remained on the back foot, sagging to fresh multi-week lows against peers including the euro and sterling.
US Treasury yields extended their retreat in Tokyo trading, sinking to six-week troughs. That helped the beaten-down yen to continue its recovery, even as data showed the Japanese economy contracted more than expected in the first quarter.
Japan’s currency was a standout, far outpacing gains against the dollar among major peers. The dollar was last down 0.66% at 153.86 yen, from as high as 156.55 in the previous session.
The 10-year US Treasury yield, which the dollar-yen pair tends to track, slipped as low as 4.705% for the first time since April 5 in Tokyo trading.
The dollar index, which measures the currency against the yen, euro, sterling and three other rivals, touched a five-week low of 104.07.
Also benefitting from broad dollar weakness, leading cryptocurrency bitcoin marked a fresh three-week top at $66,694.89 following Wednesday’s more than 7% advance.
Brent futures rose 39 cents, or 0.47%, to $83.14 a barrel, while US West Texas Intermediate crude (WTI) gained 42 cents, or 0.53%, to $79.05, adding to Wednesday’s strong gains.
Key figures
Tokyo – Nikkei 225 > UP 1.39% at 38,920.26 (close)
Hong Kong – Hang Seng Index > UP 1.59% at 19,376.53 (close)
Shanghai – Composite > UP 0.08% at 3,122.40 (close)
London – FTSE 100 < DOWN 0.38% at 8,423.79 (0933 BST)
New York – Dow > UP 0.88% at 39,908.00 (Wednesday close)
- Reuters with additional editing by Sean O’Meara
Read more:
Chinese Firms Seen Shifting Production Abroad to Avoid US Tariffs
China’s ‘White-List’ Makes Little Headway Amid Property Gloom
Japan’s SoftBank In Profit Bounceback Despite Vision Fund Hit
Nikkei Flat as Rates Fears Grip, Tariffs Weigh on China Stocks
