Asian shares jump on easing US inflation, BoK surprises by holding rates steady By Investing.com
Investing.com– Asian stocks rose sharply on Thursday as markets cheered a softer U.S. inflation reading, while South Korea’s central bank left interest rates unchanged despite expectations of a cut due to political unrest.
Regional markets accepted signs of an overnight bounce on Wall Street after Wednesday’s inflation data. US stock futures were mostly flat in Asian hours on Thursday.
The market’s focus now shifts to maturities next week. BOJ Governor Kazuo Ueda said on Wednesday that a rate hike is possible if economic and price conditions continue to improve.
Japan’s exchange rate rose 0.4% on Thursday but lagged its peers as a rising yen amid rate hike speculation put downward pressure.
A stronger yen makes Japanese goods more expensive abroad, reducing demand and reducing profit margins for exporters. This weighs on stock prices, dragging down overall market indices.
Asian shares cheer for soft US CPI, Australian shares lead the rise
The US exchange rate for December rose 0.4%, largely in line with economists’ expectations, while the Federal Reserve watched closely – was slower than expected.
That put expectations of a rate cut back on the table, boosting stocks around the world.
Australia jumped 1.4 percent. Data on Thursday showed that Australia grew by far more than expected in December, implying that the labor market is still quite hot.
In China, markets were cautious ahead of local data barrages on Friday. China’s index rose 0.1% and the index rose 0.2%. The Hong Kong index gained 0.7 percent.
The focus this week will be on data on China’s economic performance at the end of 2024. Figures for the full year 2024 are due to be released on Friday. Additionally, December data and figures are also expected on Friday.
Elsewhere, the Philippines rose more than 1% and Thailand 0.5%.
Singapore gained 0.6%, while India rose 0.1%.
The BoK remains without a rate amid the ongoing political crisis
South Korea’s index jumped 1.2% despite the central bank keeping rates on hold against expectations of a cut.
The Bank of Korea (BoK) announced on Thursday that it would keep its rate at 3.00%, contrary to widespread expectations of a 25 basis point cut.
The decision comes amid a significant political crisis following the arrest of President Yoon Suk Yeol, who has been detained following an attempt to impose martial law.
The BoK’s decision to keep rates steady appears to be an effort to stabilize the South Korean won, which recently fell to a 15-year low against the US dollar, exacerbating economic uncertainties.
