Asia tracks Wall St rally ahead of run of data, Fed decision

Asian stocks rose Tuesday, following Wall Street's lead as traders awaited a bumper round of market-moving events, starting with the release of US inflation data later today.

The consumer price index reading comes a day before the US Federal Reserve's final policy meeting of the year, which will be closely followed by investors hoping for an idea about decision-makers' plans for interest rates.

A string of data pointing to a slowdown in inflation and a softening of the labour market -- but at a pace suggesting the economy will not tip into recession -- has seen a surge in bets on the central bank cutting borrowing costs as much as four times in 2024.

"Investors sense they are nearing touchdown on the soft landing economic glide path, positioning for a benign inflation print or at least one that won't upset the market's bullish dynamics" ahead of the Fed meeting, said SPI Asset Management's Stephen Innes.

As well as the CPI figures, traders are also awaiting the release of data on US producer prices, retail sales and manufacturing.

Fed officials including boss Jerome Powell have insisted for months that although inflation continues to come down they will still keep rates elevated for some time and be guided only by data.

"There's so much to come over the next few days," said Craig Erlam of OANDA.

"The Fed decision on Wednesday is unlikely to be controversial, but the forecasts, dot plot (of rate projections) and press conference that accompany it may well be."

Wall Street traders provided a healthy lead, with all three main indexes closing higher, including the Dow ending at its highest level in two years.

The optimistic tone was also evident in Europe, where Frankfurt hit a record high and Paris finished not far from its own all-time peak.

The European Central Bank and Bank of England are also due to announce policy decisions this week.

In Asia, Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei and Jakarta were all in positive territory.

The yen edged back against the dollar after tumbling Monday on reports that the Bank of Japan saw no immediate need to tighten monetary policy.

The currency has swung sharply over the past week after hitting a four-and-a-half-month high on comments from officials including governor Kazuo Ueda that were taken as hints they could end the long-running negative interest rates policy next week.

Key figures around 0230 GMT
Tokyo - Nikkei 225: UP 0.6 percent at 32,983.37 (break)
Hong Kong - Hang Seng Index: UP 0.3 percent at 16,254.69
Shanghai - Composite: UP 0.1 percent at 2.995.08
Dollar/yen: DOWN at 145.67 yen from 146.09 yen on Monday
Euro/dollar: UP at $1.0768 from $1.0761
Pound/dollar: UP at $1.2568 from $1.2562
Euro/pound: DOWN at 85.68 pence from 85.72 pence
West Texas Intermediate: UP 0.1 percent at $71.39 per barrel
Brent North Sea crude: UP 0.1 percent at $76.10 per barrel
New York - Dow: UP 0.4 percent at 36,404.93 (close)
London - FTSE 100: DOWN 0.1 percent at 7,544.89 (close)