Asian markets advanced on Friday as softer US inflation data eased fears of another interest rate hike by the Federal Reserve. The benchmark Nikkei 225 index surged 1.1% to break past the 68,000 level, while the broader Topix index jumped 1.0% to reach 4,180.
In the foreign exchange market in East Asia, the US dollar rose slightly to 159.43 yen and 6.7441 yuan. Speculation about a possible interest rate hike by the Bank of Japan as early as next month restrained the dollar, according to traders.
The euro was nearly flat against the dollar at 1.1521 dollars.
Inflation Data and Rate Expectations
US Consumer Price Index (CPI) data for July showed a cooling trend, reducing the probability of a Federal Reserve interest rate hike in September to 40%, down from 50%.
Japan's Producer Price Index (PPI) for July eased to 7.2% year-on-year, below the 7.4% estimate and lower than June's 7.3%, according to a Bank of Japan report.
Sector Winners
Shares of Japanese electronic component makers surged as global demand for AI servers and smart hardware boosted orders for multilayer ceramic capacitors (MLCCs). Taiyo Yuden's shares rose 8.6%, while Murata Mfg gained 7.4%. Ibiden Co., Kioxia Holdings, and Advantest Corp. rose 7.3%, 6.2%, and 5.3%, respectively. Financial stocks also climbed, with Mitsubishi UFJ Financial up 1.6% and Mizuho Financial up 1.7%.
The Nikkei 225 index surged by this amount to break past the 68,000 level.
