Asian stocks surged on Thursday, following Wall Street’s rally fueled by easing U.S. core inflation, which revived hopes for potential Federal Reserve rate cuts. The MSCI Asia-Pacific index climbed 1.4%, with China’s blue chips up 0.67% and Hong Kong’s Hang Seng surging 1.5%. Taiwan’s tech-heavy stocks gained 2%, boosted by anticipation of Taiwan Semiconductor’s earnings.
In the U.S., the consumer price index (CPI) rose 2.9% annually in December, with core inflation slightly below forecasts at 3.2%, encouraging speculation of two Fed rate cuts by year-end. This softened the dollar, with the dollar index falling to 109.03. Analysts suggested the Federal Open Market Committee (FOMC) could implement a cautious easing cycle.
The Japanese yen hit a one-month high at 155.675 per dollar amid speculation of a Bank of Japan rate hike next week, with traders assigning a 70% probability. Governor Kazuo Ueda’s remarks reinforced this possibility, though some experts expect the BoJ to wait for clearer U.S. trade policy signals and stronger wage growth.
Oil prices rose after a sharp drop in U.S. crude inventories and concerns over U.S. sanctions on Russian energy trade, adding to global supply worries. Meanwhile, investor attention turned to President-elect Donald Trump’s policies, with reports suggesting a gradual implementation of tariffs, potentially boosting U.S. growth while raising inflationary pressures.
Wall Street’s overnight gains were led by robust earnings from JPMorgan, BlackRock, and Goldman Sachs, as all three major indexes posted their biggest single-day percentage gains since November 6.
