Asia stocks rise on Fed rate cut hopes

August 13, 2025 (MLN): Asia-Pacific markets opened higher on Wednesday, following Wall Street’s surge after fresh U.S. inflation data strengthened expectations of a Federal Reserve interest rate cut next month.

Japan’s Nikkei index jumped 1.4%, breaking the 43,000 mark for the first time and setting a second consecutive record high, as CNBC reported.

The MSCI All Country World Index climbed for a second session to an all-time peak of 948.54.

Cryptocurrency ether briefly touched $4,634.70, its highest level since December 2021, before easing 0.9%.

The latest U.S. consumer price index showed a 2.7% annual rise through July, slightly below forecasts, easing concerns about runaway inflation.

Traders now see a 94% probability of a September rate cut, compared with 86% a day earlier and 57% a month ago.

The optimism comes on the heels of a weaker-than-expected U.S. jobs report earlier this month.

On Wall Street, the S&P 500 and Nasdaq posted record closes after President Donald Trump signed an executive order delaying triple-digit tariffs on Chinese imports for another 90 days.

In Japan, sentiment among manufacturers improved for the second straight month, according to a private poll mirroring the central bank’s quarterly business survey.

Wholesale inflation in the country slowed in July, reinforcing expectations that price pressures from raw material costs will ease.

Market analysts said investors remain eager to pour money into equities, particularly tech stocks, on the back of strong rate cut bets and moderating inflation.

“They’re riding on 95% odds of a Fed rate cut in five weeks and feeling comfort that inflation is only creeping higher, not running amok,” said Paco Chow, dealing manager at Moomoo Australia and New Zealand.

In currency markets, the dollar held steady at 147.84 yen, while the euro edged up 0.1% to $1.1684 after a sharp jump in the previous session.

The dollar index fell for a second day.

Oil prices were little changed, with U.S. crude at $63.14 a barrel, and spot gold steady at $3,348.1 per ounce.

Early European trade saw Euro Stoxx 50 futures up 0.2%, German DAX futures higher by 0.3%, and FTSE futures up 0.1%, while U.S. S&P 500 e-mini futures were flat.

Meanwhile, political developments in the U.S. added intrigue to monetary policy discussions.

Trump nominated White House adviser Stephen Miran to temporarily join the Federal Reserve’s board, raising speculation about presidential influence over the central bank.

The White House also confirmed plans for the Bureau of Labor Statistics to continue releasing its monthly employment report after the incoming agency head had suggested suspending it, a proposal that unsettled some foreign investors.

Copyright Mettis Link News