By Gina Lee

Investing.com – Asia Pacific stocks were mixed on Thursday morning, while U.S. equity futures were on an upward trend, as a continuous debate around whether inflation is peaking saw a rally in U.S. Treasuries.

Japan’s jumped 1.16% by 10:02 PM ET (2:02 AM GMT) and South Korea’s gained 0.61%.

In Australia, the edged up 0.19%, while Hong Kong’s was down 0.40%.

China’s edged down 0.11% and the was down 0.21%, with investors continuing to assess the likelihood of further policy support. Nearly 5% of the Nasdaq China Golden Dragon Index of shares from China that were traded in America was lost.

And were higher, thanks to positive earnings from Tesla Inc. and United Airlines Holdings Inc.

Rate markets also saw a sharp repricing, with long U.S. bond yields dropping as investors including the Bank of America (NYSE:) and Nomura Asset Management touted a buying opportunity after the recent rout. Ten year yields declined further with strong demand at the 20-year bond auction fueling the rally.

Although the question of whether inflation is at its peak is still being debated, central banks are unlikely to stop them from tightening their monetary policy. However, commodity shortages caused by war in Ukraine keep prices up.

The fastest growth rate in 32-years was attained by, which is a perfect example. In the first quarter 2022, CPI rose 6.9% and 1.8% respectively.

On Wednesday, the U.S. 10 year real yields temporarily turned positive for the first-time since March 2020. Increased bets of Fed interest rate increases are also warning signs for risk assets.

“There are still some risks right now,” abrdn multi-asset solutions investment director, Asia Pacific, Ray Sharma-Ong told Bloomberg.

“It’s not over. We do still see some risk of 10-year yields pushing higher on the back of this uncertainty,” as investors await details on the Fed’s timeline for shrinking its balance sheet, he added.

The U.S. economy grew at a moderate pace through mid-April 2022, but rising prices and geopolitical developments created uncertainty and clouded the outlook for future growth, according to the Fed’s Beige Book released on Wednesday.

“Strong demand allowed firms to pass through input cost increases in consumers,” Commonwealth Bank Of Australia strategist Carol Kong said in a note.

“The anecdotal evidence supports our view the Fed is well behind the curve and needs to tighten policy aggressively.”

Now, investors are awaiting comments from Jerome Powell, Fed Chairman and Christine Lagarde (European Central Bank President) at the International Monetary Fund Event later that day. Andrew Bailey, the Governor of Bank of England will speak a few days later.

The data side of things is expected to be released later today. On Friday, the,.,. and manufacturing purchasing manager indexes will be available.