HONG KONG - Markets rallied on Monday, tracing another bump on Wall Street, where investors cheered a further slowdown in US inflation that stoked optimism the Federal Reserve will not have to hike interest rates again.
The gains built on last week's broad advance and were boosted by more pledges by China of measures to stimulate its stuttering economy.
The yen, however, remained under pressure against the dollar as traders weighed the Bank of Japan's decision Friday to loosen its grip on government bond prices, which saw the currency swing wildly.
US equities charged higher Friday after data showed the Fed's preferred gauge of inflation fell again last month to its slowest pace in two years.
The news follows a string of upbeat readings out of Washington that appear to show the central bank's long-running campaign of rate hikes is bearing fruit, while the economy remains in rude health.
On Wednesday, officials tightened again but said future decisions would be data-dependent, suggesting it may have come to the end of its cycle.
A key reading on job creation at the end of this week will be closely watched for a better idea about the bank's plans.
In early trade, Hong Kong jumped two percent while Shanghai, Tokyo, Sydney, Seoul, Singapore, Taipei, Wellington, Manila and Jakarta were also up.
China announced fresh measures Monday to boost consumption, providing further support to markets, after the government on Friday unveiled a number of initiatives for light industry.
Hopes for a government drive to kickstart the economy have provided much-needed support to markets over the past week, even as some observers warn the large-scale measures seen in the past were unlikely.