HONG KONG - Asian markets rose on Thursday as traders grew confident ahead of data later in the day that is expected to show another softening of US inflation, giving the Federal Reserve room to slow its pace of interest rate hikes.
Wall Street's three main indexes provided a strong lead, with the S&P 500 and Nasdaq soaring more than one percent each thanks to a rush back into beaten-down tech firms.
With optimism over China's reopening already fuelling a rally across Asia, signs that the Fed's long-running monetary tightening campaign is finally paying off has provided investors with more reason to be happy.
The consumer price index reading on Thursday is the key event for investors this week, though analysts warned that an above-forecast reading would deal a hefty blow to confidence on trading floors.
"An in-line or softer-than-expected CPI will likely result in a rally, whereas a hotter number could easily tip over the applecart," said Arthur Hogan at B. Riley Wealth.
"Good news for the economy can become good news for markets."
In early trade, Hong Kong again led the gains by rising more than one percent while Shanghai, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta also rallied. Tokyo was flat.
Gains were also helped by comments from Fed official Susan Collins backing a quarter-point rate hike at the bank's next policy decision on February 1.
Investors are also keeping tabs on developments in China as it emerges from years of strict zero-Covid containment measures.
While the long-term outlook remains positive, soaring infections across the country are leading to worries about the effect on economic activity.