Asian equities rallied on Wednesday after US consumer prices fell 0.4% in June, marking the first monthly decline since the pandemic and all but eliminating expectations of a July interest-rate increase. The probability of a Federal Reserve rate hike halved to 16% as core annualised inflation came in at 2.6%, below the 2.8% forecast.
South Korea's Kospi jumped 7.1% to 7,343.37 points, while Japan's Nikkei 225 gained more than 1% and Hong Kong's Hang Seng rose 1.6%. In Tokyo, Lasertec surged 10.18% and Advantest climbed 5.83% amid renewed appetite for technology shares. Shanghai Composite was a notable laggard, slipping 0.4%, even as China reported second-quarter annualised GDP growth of 4.3% and a rebound in June retail sales.
The US two-year Treasury yield dropped 11 basis points to 4.19%, and the euro held above $1.14. Gold rose 0.22% to $4,030.35 an ounce, while Brent crude advanced to $85.88 a barrel.