Asian stocks head for strongest week since March on dovish Fed

SYDNEY (BLOOMBERG) - Stocks in Asia climbed on Friday (July 14), extending their best week since March, as investors await US inflation data and earnings from some of America's biggest banks.

Shares in Japan, Australia and South Korea all advanced on the final day of a week characterized by dovish comments from policy makers in the US that also helped drag the US dollar lower. The Dow Jones Industrial Average reached a fresh all-time high overnight after Federal Reserve Chair Janet Yellen reiterated on Wednesday her intention to tighten only gradually.

The MSCI Asia Pacific Index rose 0.2 per cent, extending this week's advance to 2.5 per cent.

Japan's Topix index added 0.3 per cent. Australia's S&P/ASX 200 Index and South Korea's Kospi each advanced 0.4 per cent. Hang Seng futures were flat.

Futures on the S&P 500 Index were little changed. The underlying gauge rose 0.2 per cent on Thursday.

US consumer inflation data due on Friday will be closely scrutinized as Yellen this week said it's premature to conclude that the underlying trend of prices is falling short of the Fed's 2 per cent target. Investors also get clues on how choppy data during the second quarter translated into corporate earnings when JPMorgan Chase & Co, Wells Fargo & Co and Citigroup report results. Retail sales and industrial production figures for the US are due too.

The yen weakened 0.1 per cent to 113.43 per US dollar as of 9:20am in Tokyo. The Bloomberg Dollar Spot Index was little changed after falling 0.1 per cent on Thursday and is close to its lowest level since September.

The Aussie rose 0.1 per cent to 77.36 US cents.

The 10-year US Treasury yield increased one basis point to 2.35 per cent.

WTI crude slid 0.1 per cent, though it remains more than 4 per cent higher this week.

Gold was flat at US$1,217.32 an ounce.