Asian stocks rise ahead of expected Fed rate cut

December 12, 2024 (MLN): Asian stocks gained on Thursday, tracking Wall Street's tech-led rally overnight after an as-expected reading of U.S. consumer inflation cemented bets for a Federal Reserve interest-rate cut next week.

Japan's Nikkei topped 40,000 for the first time since mid-October, led by advances in chip-sector shares.

The exporter-heavy index also got a boost from a weakening yen, as traders pared bets for a Bank of Japan rate hike next week.

The Australian dollar surged after employment data exceeded estimates by a wide margin.

This rebound followed Wednesday's weakness caused by a Reuters report suggesting that Beijing is considering allowing the yuan to depreciate further next year.

China is Australia's top trading partner and the Aussie is often used as a liquid proxy for the yuan.

The yuan held its ground above a one-week low after the central bank set a marginally stronger official fixing.

The tech-heavy Nikkei jumped 1.5% as of 0202 GMT, while the broader Topix climbed 1.2%.

South Korea's KOSPI added 0.7%, while Taiwan's benchmark gained 1%.

Hong Kong's Hang Seng  advanced 0.4%, and mainland blue chips were 0.2% higher.

Overnight, the tech-focused Nasdaq shot up 1.8% to close above 20,000 for the first time, while the S&P 500 climbed 0.8%. Futures for both indexes, however, pointed to 0.2% declines.

The U.S. consumer price index rose 0.3% last month, marking the largest gain since April.

However, analysts noted that the increase matched economists' forecasts in a Reuters poll and was not significant enough to deter Federal Reserve officials from normalizing policy.

"The U.S. CPI print lit a flame in U.S. equity," said Chris Weston, head of research at Pepperstone.

"The market has essentially seen one of the last remaining obstacles that could derail sentiment out of the way", he said.

He further stated, "Seeing the coast somewhat clearer for the illustrious seasonal chase of returns to play out into year-end."

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