Asian markets advanced after softer-than-expected US inflation data revived hopes of another interest rate cut as soon as next month.
The yen was volatile against the dollar after the Bank of Japan raised interest rates to a three-decade high, just hours after data showed Japanese inflation held steady at 3% in November, well above the central bank’s 2% target. Tokyo’s stock market rose more than 1% following the move, which took borrowing costs to their highest level since 1995.
Global markets appeared to be ending a difficult week on a stronger footing after US inflation slowed to its lowest level since July and came in below forecasts. The data reopened the door to potential rate cuts, after traders had scaled back expectations for a fourth consecutive reduction in January following last week’s Federal Reserve decision.
Wall Street responded positively, with all three major indexes closing higher despite recent pressure driven by doubts over when massive investment in artificial intelligence will translate into meaningful returns. The Nasdaq Composite jumped 1.4%, the S&P 500 gained 0.8%, and the Dow Jones Industrial Average edged up 0.1%.
That momentum carried into Asia, where markets in Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Mumbai, Bangkok and Wellington all finished higher.
