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Asian shares spiked higher on Friday, while the dollar nursed steep losses after a smaller-than-expected increase in U.S. consumer prices fuelled hopes that the Federal Reserve could tone down its aggressive pace of interest rate hikes.
MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 3.72 percent. Australia’s S&P/ASX 200 index climbed 2.43 percent and Japan’s Nikkei rose 3 percent.
The U.S. consumer price index climbed 7.7 percent year on year – the first time since February that the annual increase was below 8 percent, and the smallest gain since January.
“It’s something the market had been waiting for a long time,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital. “There was a lot of money sitting on the sidelines.”
Overnight, the S&P 500 and Nasdaq notched up their biggest daily percentage gains in over 2-1/2 years on the data.
