SYDNEY- Asian shares tracked Wall Street higher on Thursday, buoyed by signals the US Federal Reserve may slow the pace of interest rate hikes and news of fresh economic stimulus from China, with the dollar failing to recoup losses.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 percent in early trade, boosted by a 0.6 percent gain in South Korean shares, a 0.5 percent increase in China’s bluechips and a 0.9 percent jump in Hong Kong’s Hang Seng index.
Japan’s Nikkei surged 1.3 percent.
S&P 500 futures were up 0.2 percent, while Nasdaq futures rose 0.3 percent, after modest gains in US stocks on Wednesday.
On Thursday, Bank of Korea slowed down the pace of tightening to a more modest 25 basis points, joining other central banks that have downshifted away from outsized hikes amid a looming global recession.
Minutes of the US Federal Reserve’s last meeting also showed a “substantial majority” of Fed policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes.
“In all, it is clear from the minutes that FOMC participants are determined to further raise the policy rate in the face of a very tight labor market and unacceptably high inflation,” said analysts at Barclays.
“However, the minutes also reveal an emerging divergence of views among members about the peak rate, and uncertainty about the peak rate.”
The futures market implies a 76 percent chance of a rise of 50 basis points to 4.25 percent-4.5 percent at the December meeting, while a majority of investors expect the target US federal funds rate will peak above 5 percent by next May.
US economic data on Wednesday showed jobless claims increased more than expected last week, while business activity contracted for a fifth month in November.
In Japan, data on Thursday showed manufacturing activity contracted at the fastest pace in two years in November.
