BOJ Wagers Heat Up as Fed Bets Cool Amid US Inflation Data
The anticipation for Wednesday's US CPI data was high, but it ultimately proved to be largely in line with expectations. The numbers were perhaps even a little anticlimactic, dampening money-market bets on a September Federal Reserve rate hike.
However, the Bank of Japan is not experiencing similar doubts about its own rate hike plans. Thursday's Japanese wholesale inflation data showed a 7.2% year-on-year rise in July, suggesting that price pressures remain alive and resilient.
The strong demand induced by the AI boom and higher raw-material costs from the Middle East war are driving these inflationary pressures. As a result, Asian stocks were mostly firm in morning trading, with South Korean shares hitting their highest levels in three weeks on chip stocks.
Oil prices fell after forecasters scaled back this year's global demand outlook, citing the broader fallout from the Middle East war. U.S. crude shed 1.3% to $82.19 a barrel and Brent eased to $87.95 per barrel.