Asian Stocks Rise on Expected US Inflation Data

Asian stocks rose on Thursday after US inflation data came in as expected, dampening expectations of further near-term Federal Reserve rate hikes. The MSCI's broadest index of Asia-Pacific shares outside Japan increased by 0.97%, with South Korean shares jumping 4.4%. Japan's Nikkei gained 1.86%.

The small increase in US consumer prices could weaken the argument for an interest rate increase from the Fed next month, with money markets predicting a 40% chance of a rate hike, down from 54% a week ago, according to CME Group's FedWatch. Den Miki, senior rate strategist at SMBC Nikko Securities, noted that both the Fed and markets will likely want to assess the data right up until just before the September FOMC meeting.

Oil prices eased but remained elevated in Asia, with US crude falling 0.83% to $82.58 a barrel and Brent falling to $88.35 per barrel, down 0.71% on the day. The Iran-US standoff over efforts to agree a permanent end to the war in the Gulf showed no signs of resolution.