HONG KONG - Most Asian equities rose on Tuesday, tracking big gains on Wall Street as investors gear up for the release of crucial US inflation data later in the day, though analysts warned the optimism might be overdone.
After a bright January, traders have endured a shaky couple of weeks as they contemplate the prospect of more Federal Reserve interest rate hikes aimed at cooling a still-robust economy.
The main blow came from a blockbuster jobs report earlier in the month that led several central bank officials to insist they will keep tightening monetary policy until they have brought prices under control.
The consumer price index is forecast to have dipped to 6.2 percent last month from 6.5 percent in December, according to Bloomberg.
But that is still well above the Fed's target of two percent, and analysts said a higher read on the CPI could spark a hefty sell-off on markets, with traders already worried the United States could tip into recession.
In early trade, Tokyo rose along with Shanghai, Sydney, Singapore, Seoul, Wellington, Taipei, Manila and Jakarta.
Hong Kong was dragged down by another drop in Chinese tech firms.
The broad gains followed a strong lead from Wall Street, where all three main indexes closed more than one percent higher.
However, strategists at Morgan Stanley warned equities could suffer sharp losses this year.
The yen, meanwhile, ticked up slightly against the dollar Tuesday as Japanese Prime Minister Fumio Kishida nominated respected economics professor Kazuo Ueda to take the helm at the Bank of Japan.
Ueda will be tasked with kickstarting the torpid economy while also facing pressure to join international peers in tightening monetary policy after years of ultra-loose measures.
The bank last year made small adjustments that allowed the yield of government bonds to move in a wider band, which sent the yen surging, though it has made no more changes since.
The nomination came as data showed Japan's gross domestic product expanded at a smaller-than-expected 0.2 percent in the last quarter of 2022.