Asian Stock Markets Rally on Wall Street Surge, Dollar Weakens
Asian stock markets rallied on Thursday, following Wall Street’s surge to all-time peaks overnight. The boost came after a milder U.S. inflation report raised expectations that the Federal Reserve will deliver at least two rate cuts this year.
The dollar remained on a downtrend, hitting fresh multi-week lows against currencies like the euro and sterling. U.S. Treasury yields also extended their retreat in Tokyo trading, sinking to new six-week troughs. This helped the yen to continue its recovery, despite data showing the Japanese economy contracted more than expected in the first quarter.
Gold prices marched back toward record levels, while crude oil added to gains after rebounding strongly from a two-month trough.
The U.S. consumer price index (CPI) rose by 0.3% in April, below expectations of a 0.4% gain. This raised hopes that the Federal Reserve could cut interest rates twice this year. Fed funds futures now show 52 basis points of cuts this year, with one in September fully priced.
Overall, the market sentiment was positive, with Asian shares outside Japan climbing 1.44%. Hong Kong’s Hang Seng advanced 0.9%, and Australia’s stock benchmark rallied 1.5%. Japan’s Nikkei initially jumped 1.3% but pared gains to 0.6% amid late disappointing earnings and yen rally concerns.
The dollar weakened against major peers, with the yen standing out. The euro and sterling also made gains, while leading cryptocurrency bitcoin marked a fresh three-week top. Gold prices pushed toward all-time peaks, and crude oil prices rose, adding to Wednesday’s gains.
The market outlook remains positive, with investors closely watching developments in the global economy and central bank policies.