SINGAPORE : Asian stock markets were buoyed on Tuesday by overnight optimism on Wall Street that the U.S. Federal Reserve and other central banks would ease off on the pace at which interest rates have been hiked to tackle the highest inflation levels in decades.
A key focus for traders was U.S. inflation data due out at 1330 GMT on Tuesday, with core CPI expected to slow from 6.3 per cent to 6.1 per cent and headline inflation dropping to 7.3 per cent. Treasury Secretary Janet Yellen struck a cautious note on Sunday in saying she expected a substantial slowdown in 2023 inflation, but that the U.S. economy remained prone to shocks.
"Given the very close proximity to the FOMC, it clearly has the ability to change the tone of the message ... but is highly unlikely to change the headline 50 bps hike," Deutsche Bank said in a research note. The dollar was firm, rising 0.8 per cent versus the yen overnight and steady at 137.62 yen in early Asia trade on Tuesday. It also held onto gains on the Australian dollar at $0.6756.