Asian Stocks Climb as US Inflation Data Reduces Rate Hike Bets

Asian stocks rose on Thursday as US inflation data tempered expectations of a Federal Reserve rate hike in September. The data showed that US consumer prices increased by 0.1% in July, in line with forecasts.

This small increase weakened the argument for an interest rate increase from the Fed next month, leading to a decline in market expectations of a rate hike. Money markets now predict a 34% chance of a September rate hike, down from 55% a week ago, according to CME Group's FedWatch.

The Japanese yen softened against the dollar amid growing speculation that the Bank of Japan would hike interest rates next month, earlier than the previously expected December timeline. The yen fell 0.04% to 159.33 as investors weighed the likelihood of a rate increase.