Asian stock markets surged on Thursday as investors cheered a softer-than-expected U.S. inflation reading, while South Korea’s central bank left interest rates unchanged despite expectations of a cut amid political unrest.
Regional markets took cues from an overnight surge in Wall Street after Wednesday’s inflation data. U.S. stock futures were largely steady in Asia hours on Thursday.
The Bank of Japan is set to announce its interest rate decision next week, which could impact Asian markets. BOJ Governor Kazuo Ueda said a rate hike is possible if economic conditions continue to improve.
Japan’s Nikkei 225 rose 0.4% but lagged peers due to a strong yen amid speculation about a potential rate hike. The yen’s value makes Japanese goods more expensive abroad, reducing demand and profit margins for exporters.
A stronger yen weighed on Japan’s stock market, dragging down overall indices. However, this didn’t stop other Asian markets from rising. Australia’s S&P/ASX 200 jumped 1.4% after strong job market data in December showed a labor market that was still “hot.”
Other Asian markets also saw gains, including China, Hong Kong, and Singapore. The Philippines’ PSEi Composite climbed more than 1%, while Thailand’s SET Index rose 0.5%.
In South Korea, the KOSPI index jumped 1.2% despite the central bank holding rates steady against expectations of a cut amid a significant political crisis following President Yoon Suk Yeol’s arrest.
The Bank of Korea maintained its interest rate at 3.00%, contrary to expectations of a 25 basis point cut. This decision may have been aimed at stabilizing the South Korean won, which has plummeted to a 15-year low against the U.S. dollar.
Source: https://www.investing.com/news/stock-market-news/asia-stocks-jump-on-us-inflation-relief-bok-surprises-by-keeping-rates-steady-3815604