Asian shares rose on Thursday as investors cheered signs of easing inflationary pressure in the U.S. after data showed consumer prices in April rose at a slower-than-expected pace.
The Labor Department's Consumer Price Index (CPI) rose 4.9% in April from a year ago, compared with expectations of a 5% increase, raising hopes that the Federal Reserve's interest rate hiking cycle is close to an end. Month-over-month CPI in April rose 0.4% after gaining 0.1% in March.
"Should the data stay strong again in May there is every likelihood the FOMC will have to revise up its GDP and inflation projections and take down its unemployment forecast of 4.5% for Q4 this year. That could have significant implications for the dot plot," ANZ analysts said in a note.
Markets are also watching out for China's consumer and producer price growth data and Japan's full-year earnings season which rolls on with Honda, Nissan and SoftBank Group among the companies reporting.
China's consumer prices rose at a slower pace and missed expectations in April, while factory gate deflation deepened, data showed on Thursday, suggesting more stimulus may be needed to boost a patchy post-COVID economic recovery.
Group of Seven (G7) finance leaders on Thursday open three days of meetings in Japan and will seek to diversify supply chains away from China - but also try to get Beijing's cooperation in solving global debt problems.
Early in the Asian day, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4%.
Australian shares were down 0.19%, while Japan's Nikkei stock index slid 0.13%.
China's blue-chip CSI300 index edged up 0.15% in early trade, while Hong Kong's Hang Seng index opened 0.41% higher.
A gauge of global stock markets rose and bond yields slid on Wednesday after data showed U.S. consumer prices in April rose at a slightly slower-than-expected pace, suggesting the Federal Reserve is succeeding in taming high inflation.
The Nasdaq ended Wednesday at its highest intraday level in more than eight months, boosted by the lower-than-expected increase in April inflation and Alphabet Inc's latest artificial intelligence rollout.
The Nasdaq Composite added 1.04% while the Dow Jones Industrial Average fell 0.09% and the S&P 500 gained 0.45%.
The two-year Treasury yield, which typically moves in step with rate expectations, touched 3.9222% compared with a U.S. close of 3.901%. The yield on benchmark 10-year Treasury notes reached 3.4326% compared with its U.S. close of 3.436% on Wednesday.
The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, edged 0.01% lower to 101.4.
The Japanese yen held to gains and was last seen at 134.070. The European single currency was up 0.1% on the day at $1.0989, having lost 0.28% in a month.
Oil prices rose in early Asian trade after strong demand for fuels in the U.S. outweighed concerns about the possibility of the world's biggest oil producer and consumer defaulting on its debt.
U.S. crude ticked up 0.54% to $72.95 a barrel. Brent crude rose to $76.81 per barrel.
Gold was slightly higher. Spot gold was traded at $2034.43 per ounce.
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