Asiaâ€™s stock markets followed Wall Street higher on Thursday, as investors returned to tech stocks, gold and selling dollars after steady virus figures and a surprising jump in US inflation boosted sentiment.
MSCIâ€™s broadest index of Asia-Pacific shares outside Japan was up 0.2%, and gains in semiconductor makers drove Japanâ€™s Nikkei 1.9 percent higher to a six-month peak.
The rises come after a tech rally left the S&P 500 within a whisker of a record closing high overnight, in a climate where even bad news is regarded as good news if it increases the chances of more stimulus to aid recovery.
â€œWeâ€™d seen value outperforming over the last few days, but that was unwound last night,â€ said Chris Weston, head of research at Melbourne brokerage Pepperstone, pointing to a drop in U.S real yields as inflation expectations rose.
â€œMaybe that was enough to get people back into the short dollar, long precious metals, long tech trade,â€ he said.
Rising fuel costs lifted US consumer prices 0.6 percent last month, compared with expectations for 0.3%, leaving core inflation at 1.6 percent for the year to July.
At the same time, the number of daily new COVID-19 infections in the United States seems to be stabilising around 55,000. S&P 500 futures traded flat.
The bond market was steady after a huge auction and the generally upbeat mood drove selling overnight, with benchmark 10-year US debt yielding 0.6622%.
A softer dollars helped gold rise steadily, adding 1 percent to $1,937 an ounce after whipsawing around $1,900 overnight.
Australia was the outlier in regional equity markets, with selling of communications giant Telstra after a profit plunge dragging on the index.
Markets are still eagerly awaiting a breakthrough in wrangling over the next US stimulus package, despite little sign of progress in talks, and a crucial weekend meeting between US and Chinese trade officials.
â€œExuberance in US equities begs the question of whether markets have succumbed to inflated optimism rather than reacting to inflation and some optimism,â€ said Vishnu Varathan of Mizuho in Singapore, warning the inflation bounce seemed fragile.
â€œThe V-shaped market rebound appears removed from the lived realities of an arduous slog back for the real economy,â€ he said.
Besides gains on Wall Street the broader mood had investors turning the blowtorch back on the US dollar.
It has steadied in August after a 4 percent slump in July against a basket of currencies, but was trading under pressure on Thursday as a cautious tone from Federal Reserve policymakers overnight reinforced expectations for low rates for a long time.
The dollar was last 0.2 percent weaker on the euro at $1.1806 while sterling crept off a one-week low hit in the wake of diabolical growth figures overnight.
The only saving grace from a record 20.4 percent crash in second-quarter growth in Britain, the most severe contraction reported by any major economy so far, was a surprisingly strong 8.7 percent rebound in June.
The Australian dollar briefly rose after data showed better-than-expected hiring last month, but as it was not enough to stave off a rise in unemployment to a two-decade high the currency settled to steady at $0.7168.
â€œThe likelihood is that job gains will be much harder to generate in the coming months,â€ said ING economist Rob Carnell. â€œThe economy is still operating far from business as usual.â€
In commodities oil mostly clung on to solid gains made overnight when a drop in US crude inventories spurred hopes that fuel demand is recovering.
Brent crude futures were last 0.3 percent softer at $45.28 a barrel, while US crude dipped by the same margin to $42.54 a barrel.