Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were all in the green
Asian markets mostly gained on Friday and the yen sat around nine-month highs after another positive day on Wall Street as investors brace for an expected US interest rate cut next week.
More data suggesting the Fed was winning the battle against inflation provided an extra boost for equities after another rollercoaster week that started with big losses fuelled by concerns the US economy could be heading for recession.
While concern after last Friday’s big miss on US jobs creation – which followed another well-below-forecast read a month ago – continues to linger, traders are now turning their focus to the Fed decision on September 18.
Having cut rates in the early months of the pandemic, the Federal Reserve began hiking in 2022 as inflation started to take hold, and they kept lifting for a year until rates reached a two-decade high.
Now, with disinflation seemingly kicking in and the labour market weakening, decision-makers are tipped to start reducing again, but discussion revolves around whether it will go for a 25 or 50 bp move.
Figures on Thursday showed wholesale prices rose 0.2% in August, putting the benchmark on an annual basis at 1.7%, down from a revised 2.1% the previous month.
However, when volatile food and energy components were stripped out, they were up 0.3%, topping forecasts.
The readings came a day after news that the CPI had reached its lowest level since February 2021, but the core reading had increased more than expected from the previous month.
Observers said the data did little to alter the view that borrowing costs would drop but made the case for the bigger move harder.
Confidence that the Federal Reserve would cut provided support to Wall Street, especially the key tech sector, with the Nasdaq gaining 1%.
And Asia mostly followed suit.
Hong Kong added more than 1%. Ecommerce titan and market heavyweight Alibaba was a key driver of the gains, building on this week’s rally as mainland Chinese investors snap it up after it was included Tuesday in a programme that allows them to buy stocks in Hong Kong-listed companies.
Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were also well in the green.
