Asian Shares Follow Wall Street Higher On Fed Rate-cut Hopes

(RTTNews) - Asian stocks advanced on Thursday as soft inflation readings from the U.S. spurred expectations for more Fed rate cuts this year.

The dollar weakened while the Japanese yen surged to hit a one-month high on potential Japanese rate hikes.

Gold held steady below $2,700 per ounce after several Federal Reserve officials said they are confident that inflation is on its way to a 2 percent annual rate.

Oil extended gains after hitting multi-month peaks in the previous session, driven by a larger-than-forecast fall in U.S. crude oil stocks and concerns around the potential impact of the new U.S. sanctions on Iranian and Russian crude oil exports.

China's Shanghai Composite index rose 0.28 percent to 3,236.03 ahead of forthcoming release of GDP figures for the final quarter and other key economic indicators due on Friday.

Hong Kong's Hang Seng index rallied 1.23 percent to 19,522.89, led by real estate and technology stocks.

Japanese markets eked out modest gains despite the yen's rise amid speculation of a BoJ rate hike next week. The Nikkei average edged up by 0.33 percent to 38,572.60 while the broader Topix index settled marginally lower at 2,688.31.

Tech stocks jumped despite the United States unveiling further export controls on advanced computing semiconductors. Advantest rose 1.2 percent, SoftBank Group rallied 2.2 percent and Tokyo Electron surged 3.9 percent.

Japan's annual wholesale inflation held steady at 3.8 percent in December on stubbornly high food costs, data showed today, a day after Bank of Japan Governor Kazuo Ueda said the bank will debate whether to raise rates at the Jan. 23-24 meeting.

Seoul stocks ended sharply higher as the Bank of Korea surprised markets by keeping its policy rate at 3 percent after two consecutive rate cuts in the fourth quarter of last year. The Kospi average closed up 1.23 percent at 2,527.49, led by big-cap tech shares.

Australian markets rallied as data showed the unemployment rate rose slightly in December, increasing the chances of an interest rate cut in February. The benchmark S&P/ASX 200 climbed 1.38 percent to 8,327, led by banks and technology stocks.

The broader All Ordinaries index settled 1.33 percent higher at 8,569.10. Top lender Commonwealth Bank of Australia rose nearly 3 percent after five straight sessions of losses.

Across the Tasman, New Zealand's benchmark S&P/NZX 50 index rose 0.44 percent to 13,000.67, the highest level since Jan. 9.

U.S. stocks rallied overnight, the dollar dipped, and bond yields fell as investors cheered a soft inflation print and upbeat earnings from the likes of JPMorgan Chase, BlackRock, Goldman Sachs and Citigroup.

Data showed the consumer price index (CPI) rose in line with expectations at an annual rate of 2.9 percent in December, from November's 2.7 percent - matching expectations.

The annual rate of core consumer price growth unexpectedly slowed to 3.2 percent from 3.3 percent, raising expectations that the Federal Reserve could ease rates further.

The tech-heavy Nasdaq Composite soared 2.5 percent, the Dow climbed 1.7 percent and the S&P 500 surged 1.8 percent - logging their largest daily percentage gains in over two months.