SINGAPORE- Asian stocks rose on Wednesday, bonds were firm and the dollar nursed losses after data showed US consumer prices barely rose in November, stoking hopes that inflation has peaked and interest rate increases will slow and eventually stop in 2023.
Nervousness about policymakers’ next moves, though, kept the mood in check ahead of a Federal Reserve meeting later in the day and central bank meetings in Britain and Europe on Thursday. Investors are also turning watchful on China’s reopening.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent. Japan’s Nikkei rose 0.7 percent.
Overnight Wall Street surged, before paring gains to leave the S&P 500 up 0.7 percent at the close. The dollar, which is falling from 20-year highs as US interest rate expectations retreat, dropped broadly and sharply, while bonds rallied.
“Equities whittled their gains in the session,” said Vishnu Varathan, head of economics at Mizuho Bank in Singapore, as investors chewed over some of the details in the inflation data and turned their focus to the Fed decision.
“I suspect it was a bit of ‘hang on, guys,’ – next up is the (Fed) and maybe we want to take some profit and keep our positions trim.”
The US consumer price index increased 0.1 percent last month, 0.2 percentage points slower than economists expected, and in the 12 months through November, headline CPI climbed 7.1 percent – its slowest pace in about a year.
The S&P 500 was up nearly 2.8 percent at one stage, while the Nasdaq rose as much as 3.8 percent before closing 1 percent higher. S&P 500 futures rose about 0.2 percent in Asia.
