Asian stocks rise on US inflation data

Asian stocks surged on Monday following a positive report on US inflation, raising expectations for additional policy support next year. Investors were also relieved that the US government had avoided a shutdown.

Following the US inflation report, the MSCI’s broadest index of Asia-Pacific shares outside Japan rose by 0.3 per cent.

The Nikkei in Japan increased by 1.2 per cent, with the Topix automaker index also rising by 1.3 per cent due to positive developments in a potential Honda and Nissan merger.

South Korean shares saw a 1.3 per cent gain, while Taiwan’s market surged by 2.6 per cent. Chinese blue chips rose 0.7 per cent, as 10-year bond yields reached a new low of 1.665 per cent, despite the central bank’s efforts to halt the downward trend.

The dollar remained strong at 156.55, showing a 4.5 per cent increase in December. However, the yen could face potential Japanese government intervention if it approaches the 160.00 barrier.

The robust dollar and high bond yields put pressure on gold, which was at $2,625 per ounce after a one per cent decline last week.

Oil prices slightly increased along with other risky assets, despite concerns about the strong dollar and Chinese demand following disappointing retail sales data last week.

Attribution: Reuters

Subediting: M. S. Salama