International Finance: Asia stocks rise on US inflation bets; yen rallies: markets wrap

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Asian equities followed Wall Street higher on Thursday as wagers for a further softening of US inflation buoyed appetite for risk taking in global markets.

An index of the region’s stocks rose 0.8%, its ninth advance in 10 days, and headed for the highest level in about five months. Australian and New Zealand bond prices climbed as Treasuries held gains from the US session.

A gauge of dollar strength extended its small decline from Wednesday as investors looked beyond the drumbeat of hawkish comments from Federal Reserve officials.and the spectre of a recession as they focus on the upcoming US consumer price index.– which excludes food and energy and is seen as a better indicator than the headline measure. The projected 5.7% increase would be well above the Fed’s goal, helping explain its intention of keeping rates higher for longer.

The technology sector, one of the most-beaten down groups during the Fed’s tightening campaign, led gains among US shares. The open of trading on Thursday saw futures for the S&P 500 and Nasdaq 100 edge lower.showed factory-gate prices falling more than expected in December and consumer prices ticking up as the end of Covid Zero snarled manufacturing operations but eliminated mobility curbs on people. The offshore yuan fluctuated while remaining near Wednesday’s closing level.

The Pacific Investment Management Co said that while a recession could further challenge riskier assets like stocks, it continues “to see a strong case for investing in bonds, after yields reset higher in 2022 and with an economic downturn looking likely in 2023”.

 

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