By Kevin Buckland
TOKYO (Reuters) – Tech stocks led advances in Asia on Thursday, taking their cue from Wall Street’s gains after tepid inflation data allayed concerns over the state of the U.S. economy.
U.S. Treasury yields remained elevated after pulling further away from recent lows the day before, on escalating tit-for-tat tariff battles between the United States and trading partners.
The euro was steady after slipping back from a five-month high on Wednesday, when President Donald Trump warned of a response to the European Union’s threatened counter-tariffs on U.S. goods. However, the shared currency continued to garner support from signs of progress towards peace between Russia and Ukraine.
Gold climbed to within $13 of its record peak, while crude oil was stable following a 2% climb in the prior session on the back of a smaller-than-expected rise in U.S. stockpiles. [O/R]
Japan’s Nikkei gained 0.9%, buoyed by advances in chip-sector heavyweights such as Advantest and Tokyo Electron.
Taiwan’s tech-heavy equities index added 0.6%, and South Korea’s KOSPI climbed 0.7%
Mainland Chinese blue chips edged up 0.1%, although Hong Kong’s Hang Seng retreated from small early gains to be down 0.3%.
The U.S. S&P 500 advanced 0.5% on Wednesday, and the Nasdaq jumped 1.2%, with beaten-down megacap tech shares rebounding sharply. Futures in both indexes pointed 0.1% higher on Thursday.
On Wednesday, data showed U.S. consumer prices rose 0.2% last month after accelerating 0.5% in January. Excluding the volatile food and energy components, the CPI climbed 0.2% in February after gaining 0.4% in January.
The inflation figures were closely watched following a run of softer economic data recently and the potential inflationary impact of Trump’s tariff campaign.
However, analysts noted the components that were mainly responsible for the cooling in price pressures will not feed into the Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditures (PCE) price index. Producer prices due later on Thursday will also bear close scrutiny.
“Uncertainty remains in the air as the outlook for consumer price inflation remains blurred by trade policy developments,” TD Securities analysts wrote in a client note.
“The impact from the recent implementation of tariffs on Chinese, Canadian and Mexican goods and the expectation of further announcements suggest the worst is yet to come.”
Trump’s increased tariffs on all U.S. steel and aluminium imports took effect on Wednesday, stepping up a campaign to reorder global trade in favour of the U.S. and drawing swift retaliation from Canada and Europe.
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