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Asian shares climb after cooler US CPI lifts Fed policy expectations

US headline CPI eased to 3.4% year over year in July, while CME FedWatch showed about a 40.1% chance of a September rate hike.

Reported · Written up by our desk · Major Pairs

Asian markets largely rose as softer US inflation data strengthened expectations that the Federal Reserve could take a more accommodative stance. FXStreet cited July US headline CPI rising 3.4% year over year, down from 3.5% in June, while core CPI increased 2.5% year over year versus 2.6% previously. The report said both readings matched market forecasts.

The inflation print shifted rate odds, according to CME FedWatch referenced by FXStreet. FXStreet said interest-rate swaps were pricing roughly a 40.1% chance of a rate hike in September, down from about 75% the prior day, and that October odds fell to around 60%, with another potential increase not fully priced until December.

Technology stocks helped support risk appetite, as investor focus turned to AI-related earnings strength. FXStreet said major tech results reinforced confidence in continued spending on AI infrastructure, and pointed to Japan and South Korea leading gains, with Japan’s Nikkei 225 rising 1.63% and South Korea’s KOSPI jumping nearly 4.22%.

Chipmakers were among the biggest drivers in the region, FXStreet reported, with Samsung Electronics up nearly 5% and SK Hynix gaining over 9% following strength in US technology shares. In China, FXStreet said the Shanghai Composite rose 0.40% and the Shenzhen Component climbed 0.73%, alongside continued attention on Semiconductor Manufacturing International Corp. ahead of its expected earnings release later Thursday.

Latest closeNikkei 225 66,970.22 ▲2.1%|Kospi 6,345.53 ▲0.7%

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