Stocks in Asia rose Thursday for the first time this week, as a tech-fueled rally on Wall Street spread across the region. Risk appetite returned as US inflation data for August supported bets for a Federal Reserve rate cut next week.
Benchmarks in Japan, South Korea and Taiwan advanced, pushing the MSCI Asia-Pacific Index to the biggest gain in almost a month.
“The tech rebound and increased appetite for risk-taking are enjoyed by the Asian markets as well,” said Jun Rong Yeap, market strategist at IG Asia.
“Rate expectations are still split on what will come beyond September, so that may still see some caution creeping back in as the Fed meeting nears,” he said.
Traders have swung between optimism that the Fed will guide the US economy to a soft landing and fear that the central bank has left it too late to cut rates. While swaps have now priced in a 25 basis point rate reduction next week, debate over the path for further reductions continues, and some investors say markets have overpriced expectations.
