Asian Stocks Split as Softer US Inflation Cools Fed Rate Hike Bets

Asian stock markets were mixed on October 1 as investors assessed fresh U.S. inflation data and its impact on interest rates.

The broad Asia-Pacific ex-Japan equity index fell 0.2%, while South Korea's Kospi slipped 0.14%. Japan's Nikkei, however, gained more than 1% driven by rising shares of chipmakers.

U.S. inflation rose less than analysts expected in August, reducing the likelihood of a Federal Reserve rate hike later in the month. The probability of such a move was scaled back to 38%, down from 50% the previous day.

Bond yields remained high, with the yield on 10-year U.S. Treasury bonds reaching 5.306%, its highest level since mid-June 2007. Nomura's global head of fixed-income sales, Darren Shames, believes that investors are more concerned about how quickly rates are rising.