Asian Markets Surge Ahead of Crucial Week for Interest Rates and Inflation

The Asian markets saw a boost on Monday as tech firms rallied, despite a mixed day for stocks. Chipmakers in Seoul and Tokyo led the gains, with Samsung and SK hynix soaring 4% and 6%, respectively. This uptick comes ahead of crucial events this week, including US inflation data that could determine the Federal Reserve's decision on interest rates.

The release of the US consumer price index (CPI) for August is seen as critical in deciding whether the Fed hikes rates next week or stands pat. The CME Group's FedWatch tool puts the chances of an increase at over 56% after figures showed the US economy created far more jobs than expected in August.

Elias Haddad at Brown Brothers Harriman warned that a hot CPI print would all but seal a September hike and underpin a firmer US dollar, while a cooler reading would strengthen the case for a hold. The yen held last week's gains against the dollar amid speculation the Bank of Japan will hike borrowing costs at each of its next two meetings.

The spike in oil prices sent US diesel prices to a record high of $5.85 a gallon last week, further adding upward pressure to inflation expectations. Markets are bracing for a potentially volatile week ahead of central-bank meetings, US inflation data, and Oracle earnings.