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Asian markets rose Thursday as investors gear up for the release of major US inflation data that could have a huge bearing on the Federal Reserve's timetable for cutting interest rates.
The positive vibes on trading floors follow gains on Wall Street, where tech firms bounced after a relatively dour start to the year and dealers were also gearing up for the start of corporate earnings season.
Meanwhile, bitcoin dipped slightly after a small rally fuelled by confirmation that US authorities had approved several exchange-traded funds for the cryptocurrency for the first time.
After the disappointment of last week's minutes showing the Fed remained keen to hold rates at 22-year highs for some time, analysts said the consumer price index reading Thursday could play a key role in near-term market dynamics.
The figures are expected to show inflation continuing to fall, but observers warned a miss to the upside could spark fresh selling in equities.
Dealers have struggled at the start of the year as the rally at the end of 2023 peters out on worries they may have been a little too eager to price in a first rate cut by March followed by several more over the next 12 months.
However, a below-forecast reading could light the fuse for a buying spree, they said.
Matt Eagan, at Loomis, Sayles & Co., said the report would likely come "in line with consensus".
"Our expectations are for headline inflation to continue to cyclically bottom well below three percent, possibly to 2.5 percent, and for the Fed to then start cutting rates sometime over the next six months."
New York Fed boss John Williams said rates were well placed to get inflation back to the bank's two percent target but expected officials would "need to maintain a restrictive stance of policy for some time to fully achieve our goals".
All three main indexes on Wall Street enjoyed an up day Wednesday, boosted by gains in tech titans including Amazon, Microsoft and Alphabet, which have had a weak start to 2024.
Asia enjoyed a rare day in the sunshine, with Tokyo leading the way, piling on close to two percent to a fresh 34-year high as a weak yen helps exporters.
Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Jakarta were also well up.
Bitcoin held at around $46,600, having burst above $47,700 earlier in the day after news that the Securities and Exchange Commission had given the go-ahead for ETF trading.
The SEC approved the plans for 11 ETFs to list on leading exchanges including the New York Stock Exchange "on an accelerated basis", it said.
Analysts said the unit failed to take off after the news as the decision had largely been priced in over recent weeks.
ETFs are traded on public markets, granting investors exposure to price movements in asset prices without taking direct ownership of the underlying assets.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: UP 1.9 percent at 35,110.52 (break)
Hong Kong - Hang Seng Index: UP 1.5 percent at 16,344.00
Shanghai - Composite: UP 0.1 percent at 2879.18
Dollar/yen: DOWN at 145.44 yen from 145.77 yen on Wednesday
Euro/dollar: UP at $1.0983 from $1.0976
Pound/dollar: UP at $1.2770 from $1.2742
Euro/pound: DOWN at 86.02 pence from 86.10 pence
West Texas Intermediate: UP 0.3 percent at $71.56 per barrel
Brent North Sea Crude: UP 0.3 percent at $77.01 per barrel
New York - Dow: UP 0.5 percent at 37,695.73 (close)
London - FTSE 100: DOWN 0.4 percent at 7,651.76 (close)
S.Jones--TFWP