Asian stocks climb as traders shrug off inflation surprise
Asian stocks rose on Thursday, as traders figured a small upside surprise for U.S. inflation was unlikely to push up interest rates and turned their focus to a European Central Bank meeting later in the session.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4% in early trade.
Tokyo's Nikkei rose 0.8% to a one-week high.
Overnight data showed higher fuel prices had lifted headline U.S. consumer prices by the most in 14 months in August, for an annual rate of 3.7% which was a touch above expectations.
Core inflation slowed to an annual 4.3%, as expected.
Treasury yields initially spiked higher, as did the U.S. dollar, before both retraced the move.
Benchmark 10-year Treasury yields finished the New York session a bit more than a basis point lower and fell by a further basis point early in the Asia session to 4.24%.
Two-year yields spiked above 5%, but were last at 4.97%.
«I think markets are largely prepared for a rebound in inflation, given the rapidly rising global energy prices,» said Glenn Yin, head of research and analysis at AETOS Capital Group in Melbourne.
«It does feel like the highly anticipated Fed pause next week is outweighing the fact that inflation has risen at the fastest pace in more than a year.»
Fed funds futures hardly budged on the inflation data, and imply nearly no chance of a rate hike next week, and about a 45% chance of another hike by year's end.
Also overnight chip designer Arm Holdings secured a $54.5 billion valuation, with its IPO pricing at $51-a-share at the top of the indicated range. It begins trading on Thursday.
The S&P 500 rose 0.1% and futures rose 0.2% in Asia.
