Asian stocks rallied Thursday as cooling US core inflation bolstered hopes of a pause in interest rate hikes by the Federal Reserve. Key indexes across the region, including Japan’s Nikkei 225 and Hong Kong’s Hang Seng, saw notable gains as investors digested the latest US Consumer Price Index (CPI) report. The data revealed a slight deceleration in core inflation, excluding food and energy, reinforcing optimism that monetary tightening may ease.
The CPI data, a critical gauge for the Fed’s policy trajectory, showed a month-over-month increase of 0.2%, aligning with forecasts. Analysts interpreted the results as a sign that inflationary pressures are stabilizing. Asian currencies also strengthened, with the yen and yuan making modest advances against the dollar. The prospect of steadier US interest rates has alleviated concerns over capital outflows from emerging markets, further supporting regional equities.
The market reaction underscores growing confidence that the Fed may be nearing the end of its tightening cycle, a development seen as pivotal for global economic stability.
