Asian stocks rise as US inflation cools

Asian shares rose on Thursday as investors cheered signs of easing inflationary pressure in the US after data showed consumer prices in April rose at a slower-than-expected pace.

The Labor Department's Consumer Price Index (CPI) rose 4.9 per cent in April from a year ago, compared with expectations of a 5 per cent increase, raising hopes that the Federal Reserve's interest rate hiking cycle is close to an end. Month-over-month CPI in April rose 0.4 per cent after gaining 0.1 per cent in March.

"Should the data stay strong again in May there is every likelihood the FOMC will have to revise up its GDP and inflation projections and take down its unemployment forecast of 4.5 per cent for Q4 this year. That could have significant implications for the dot plot," ANZ analysts said in a note.

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Markets are also watching out for China's consumer and producer price growth data and Japan's full-year earnings season which rolls on with Honda, Nissan and SoftBank Group among the companies reporting.

China's consumer prices rose at a slower pace and missed expectations in April, while factory gate deflation deepened, data showed on Thursday, suggesting more stimulus may be needed to boost a patchy post-Covid economic recovery.

Group of Seven (G7) finance leaders on Thursday open three days of meetings in Japan and will seek to diversify supply chains away from China - but also try to get Beijing's cooperation in solving global debt problems.

Early in the Asian day, MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4 per cent.

Australian shares were down 0.19 per cent, while Japan's Nikkei stock index slid 0.13 per cent.

China's blue-chip CSI300 index edged up 0.15 per cent in early trade, while Hong Kong's Hang Seng index opened 0.41 per cent higher.

A gauge of global stock markets rose and bond yields slid on Wednesday after data showed US consumer prices in April rose at a slightly slower-than-expected pace, suggesting the Federal Reserve is succeeding in taming high inflation.

The Nasdaq ended Wednesday at its highest intraday level in more than eight months, boosted by the lower-than-expected increase in April inflation and Alphabet Inc's latest artificial intelligence rollout.

The Nasdaq Composite added 1.04 per cent while the Dow Jones Industrial Average fell 0.09 per cent and the S&P 500 gained 0.45 per cent.

The two-year Treasury yield, which typically moves in step with rate expectations, touched 3.9222 per cent compared with a US close of 3.901 per cent. The yield on benchmark 10-year Treasury notes reached 3.4326 per cent compared with its US close of 3.436 per cent on Wednesday.

The dollar index, which tracks the greenback against a basket of currencies of other major trading partners, edged 0.01 per cent lower to 101.4.

The Japanese yen held to gains and was last seen at 134.070. The European single currency was up 0.1 per cent on the day at $1.0989, having lost 0.28 per cent in a month.

Oil prices rose in early Asian trade after strong demand for fuels in the US outweighed concerns about the possibility of the world's biggest oil producer and consumer defaulting on its debt.

US crude ticked up 0.54 per cent to $72.95 a barrel. Brent crude rose to $76.81 per barrel.

Gold was slightly higher. Spot gold was traded at $2034.43 per ounce.