Asian stocks rally on cooling US inflation, BOJ rate hike buzz

Asian stocks climbed as cooling US core inflation boosted hopes for a Federal Reserve rate cut this year. The yen strengthened o  expectations of a Bank of Japan (BOJ) rate hike.

Stock indices in Australia, Hong Kong, and South Korea advanced, tracking Wall Street’s rally after the S&P 500 gained 1.8%, its best day since November. Swap traders now fully expect a Fed rate cut by July, despite strong jobs data earlier.

The yen rose amid reports suggesting the BOJ could raise rates next week unless global economic concerns arise from Donald Trump’s presidency. Market strategist Jun Rong Yeap noted that cooling inflation improved risk appetite but added that policymakers need more progress before deciding on cuts.

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In Asia, Taiwan Semiconductor’s strong profits fueled optimism for sustained AI hardware growth, while the South Korean won slipped after its central bank hinted at a possible rate cut. Emerging-market currencies, led by the Thai baht and Russian ruble, posted their longest rally in over a month.

Oil held gains on supply concerns, while gold dipped. US retail sales and jobless claims data later Thursday will give further insights into the economy.