Asian markets rise on easing inflation and Fed rate hike hopes

Asian markets kicked off the week with gains as inflation concerns eased, lowering expectations for another Federal Reserve rate hike. Japan’s Nikkei 225 surged 2.5% to 70,037.61, its first time above 70,000 in three months. Australia’s S&P/ASX 200 rose 0.1% to 8,691.90, while Hong Kong’s Hang Seng remained flat at 23,971.55. Markets in Shanghai and South Korea were closed for holidays.

Investor interest in artificial intelligence-related stocks drove gains in Japan, with Tokyo Electron up 5.5% and SoftBank Group rising 3.3%. Taiwan Semiconductor Manufacturing Co. (TSMC) also climbed 2.6%. The positive momentum followed a strong week for U.S. stocks, which neared all-time highs after a jobs report eased inflation fears.

The S&P 500 added 0.7%, pulling within 1% of its August record, while the Dow Jones gained 0.5% and the Nasdaq rose 1.2%. The U.S. added 29,000 jobs last month, fewer than expected, suggesting the Fed may hold off on further rate hikes. The 10-year Treasury yield briefly dropped below 5.17% before rebounding to 5.28%.

Energy markets saw declines, with U.S. crude oil falling 1.03% to $90.17 a barrel and Brent crude down 0.58% to $101.66. Currency trading in Asia saw the U.S. dollar rise to 157.97 yen, while the euro weakened to $1.1179.