Asian stocks surged on Thursday, buoyed by cooler-than-expected U.S. inflation data and encouraging economic reports from Japan and China. Japanese and Chinese markets led the gains as regional sentiment was lifted by these positive indicators.
In the U.S., inflation data showed a slower rise in consumer prices, which bolstered optimism that the Federal Reserve may cut interest rates in September. This positive sentiment helped U.S. stock benchmarks reach a two-week high, with futures also rising in Asian trade.
Japanese Stocks Gain on Strong Q2 GDP
Japan’s Nikkei 225 and TOPIX indexes both rose approximately 0.9%, nearing two-week highs. The GDP data revealed that Japan’s economy grew more than anticipated in the second quarter, driven by a rebound in private consumption. This growth was supported by significant wage increases negotiated earlier in the year, which have begun to boost spending.
The robust GDP figures suggest a more optimistic outlook for Japan’s economy, recovering from a steep contraction in the first quarter. However, if inflation rises further, it could give the Bank of Japan more room to raise interest rates, potentially limiting further gains in the stock market.
Chinese retail sales also showed improvement in July, adding to the positive regional sentiment. The combined effect of stronger economic performance in Japan and increased consumer spending in China contributed to the overall uplift in Asian markets.
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