TOKYO (REUTERS) - Japanese shares led a rebound in Asian markets on Friday (May 14), building on the lead from investors on Wall Street snapping up stocks that would benefit most from an economic recovery.
The rally interrupted a three-day rout for stocks globally, as market jitters over accelerating US inflation were calmed by Federal Reserve officials reiterating that price pressures from the reopening of the economy would prove transitory.
Japan's Nikkei jumped 1.8 per cent, while Shanghai blue chips rose 0.9 per cent and Hong Kong's Hange Seng gained 0.6 per cent.
Australia's and South Korea's benchmark indices were both up 0.7 per cent.
Singapore's Straits Times Index was down 0.4 per cent at 11am local time. The nation reported 24 new Covid-19 cases in the community on Thursday, the highest daily number recorded since July last year.
"US equities were up, so there is a bit of relief in Asia," said Frank Benzimra, head of Asia equity strategy at Societe Generale in Hong Kong.
However, "we certainly are going to have some volatility near-term," as markets react to CPI and other economic indicators for clues on the path for US monetary policy.
The Fed may open the discussion on tapering its asset purchases as soon as the policy meeting next month, he said.
Data on Wednesday showed annual US consumer prices unexpectedly rose the most in over a decade, prompting markets to wager on earlier policy tightening and sending stock markets tumbling.
However, the reassurance from Fed officials about the transitory nature of inflation has for now stemmed the equities sell-off.
Among Fed speakers overnight, governor Christopher Waller signalled that rates won't rise until policymakers either see inflation above target for a long time or excessively high inflation.
S&P 500 futures pointed to further gains of 0.3 per cent when the market reopens, following a 1.2 per cent rally in the index on Thursday. The Dow Jones Industrial Average ended the day up 1.3 per cent and the Nasdaq Composite advanced 0.7 per cent.
The rally was led by shares in small-cap companies, chip makers and transportation providers - businesses that stand to gain as the United States emerges from the pandemic-induced recession.
Benchmark 10-year Treasury yields, which had spiked 7 basis points following Wednesday's CPI print in the biggest daily rise in two months, fell by nearly 4 basis points overnight and were little changed in Asian trading at 1.6642 per cent.
The US currency was steady against a basket of its major peers, with the dollar index consolidating around the 90.70 level for a second day on Friday, following Wednesday's 0.6 per cent jump.
Gold traded at around US$1,824 an ounce at the end of the week, largely unchanged from the previous day, when it recovered some of Wednesday's losses.
In cryptocurrencies, bitcoin recovered to just below US$50,000 on Friday, after plunging to a 2½-month low of US$45,700 in the previous session when a media report of a regulatory probe into crypto exchange Binance added to pressure from Tesla chief Elon Musk's reversing his stance on accepting the digital currency.
Much smaller rival dogecoin jumped as much as 20 per cent to US$0.52 after Musk said on Twitter that he was involved in work to improve the token's transaction efficiency.
Oil prices remained subdued following a drop on Thursday as a recent rally paused as investors turned their attention to the coronavirus crisis in India, and as the top US fuel pipeline network resumed operations.
Brent crude was little changed at US$67.02 a barrel, while US West Texas Intermediate crude edged up 0.1 per cent to US$63.85 a barrel.
