HONG KONG- Asian shares rose on Thursday as investors cheered signs of easing inflationary pressure in the US after data showed consumer prices in April rose at a slower-than-expected pace.
The Labor Department’s Consumer Price Index (CPI) rose 4.9 percent in April from a year ago, compared with expectations of a 5 percent increase, raising hopes that the Federal Reserve’s interest rate hiking cycle is close to an end. Month-over-month CPI in April rose 0.4 percent after gaining 0.1 percent in March.
“Should the data stay strong again in May there is every likelihood the FOMC will have to revise up its GDP and inflation projections and take down its unemployment forecast of 4.5 percent for Q4 this year. That could have significant implications for the dot plot,” ANZ analysts said in a note.
Markets are also watching out for China’s consumer and producer price growth data and Japan’s full-year earnings season which rolls on with Honda, Nissan and SoftBank Group among the companies reporting.
China’s consumer prices rose at a slower pace and missed expectations in April, while factory gate deflation deepened, data showed on Thursday, suggesting more stimulus may be needed to boost a patchy post-COVID economic recovery.
Group of Seven (G7) finance leaders on Thursday open three days of meetings in Japan and will seek to diversify supply chains away from China – but also try to get Beijing’s cooperation in solving global debt problems.
Early in the Asian day, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4 percent.
Australian shares were down 0.19 percent, while Japan’s Nikkei stock index slid 0.13 percent.
China’s blue-chip CSI300 index edged up 0.15 percent in early trade, while Hong Kong’s Hang Seng index opened 0.41 percent higher.
A gauge of global stock markets rose and bond yields slid on Wednesday after data showed US consumer prices in April rose at a slightly slower-than-expected pace, suggesting the Federal Reserve is succeeding in taming high inflation.
The Nasdaq ended Wednesday at its highest intraday level in more than eight months, boosted by the lower-than-expected increase in April inflation and Alphabet Inc’s latest artificial intelligence rollout.
