Stella Qiu, Alun John

BEIJING (Reuters] – Asian shares surpassed Wall Street’s gains on Thursday. U.S. Treasury yields remained stable and the dollar lost ground, as U.S. data raised hope that inflation might be at its peak. However, several central banks have raised their rates aggressively.

The traders waited for the European Central Bank to meet later that day. They wanted to know if they were as hawkish than others.

MSCI’s Asia-Pacific broadest index outside Japan rose 0.4% during early Asian trading. This was due to a 0.5% increase in Australia’s resource-heavy shares as well as a 0.6% rise in blue-chip stocks in mainland China. The index was up 1.2%.

South Korean shares were a notable exception on Thursday. In an unanticipated move to curb inflation, the central bank increased its policy rate by 0.4% to make the index fall 0.4%.

Major European and U.S markets will also be closed on Friday to celebrate Easter.

There have been two recent developments I think could boost Asian shares. The first is that U.S. core consumer price inflation has slowed…which could suggest that inflation pressures will start to subside soon in the U.S. and, secondly, Chinese policymakers have recently made encouraging comments about stabilising economic growth,” stated David Chao of Invesco, a Hong Kong-based global strategist for markets.

I have argued that increased money supply and credit growth may provide a ceiling for Chinese equity and indicate that investor sentiment might soon begin to improve, particularly if geopolitical and COVID concerns slow down.

China’s cabinet announced Wednesday that it would reduce banks’ reserve requirements ratios (RRR), in support of an economy suffering from COVID-19 lockdowns.

In early Asian trade, yields on U.S. Treasuries remained steady. Inflation was lower than anticipated, with the yield at 2.7120%. This is compared to a high of 2.836% three years ago.

The yield for the next two years was 2.3745%, while it was close to 2.3727% on Monday.

After the previous session, when it had fallen to 126 yen/dollar, the U.S. yields were able to offer some relief for the battered yen.

The potential for aggressive U.S. interest rates hikes, and the growing expectations of the market that the Bank of Japan will hold rates low in the immediate future have all contributed to the weakening of the yen.

Although the euro gained 0.2% against the US dollar, it still fell to its one-month low of 1.1% due to fears about Ukraine.

Although equity markets have been affected by central bank hawkishness on Wednesday, Wall Street rallied to close sharply higher due to a rebound in interest-sensitive stocks. The Dow gained more that 1% while the Nasdaq increased by over 2%.

U.S. Stock investors have started to buy into the “prediction that inflation will peak” and appear to be optimistic that all of the negative news can already be priced out, according Hebe Chen (IG market analyst), in a note.

New Zealand’s central banks raised interest rates by 50bps Wednesday. This is the most significant increase in rate in almost two decades. The Bank of Canada increased rates by 50bps Wednesday.

Market optimism could be stifled by geopolitical risk. Ukraine said Wednesday that Russia is intensifying its efforts in South and East to take control of Mariupol. Meanwhile, Western countries have increased military support for Kyiv.

After rising strongly in the second half of the week and falling sharply the first two, oil futures fell slightly Thursday morning. This was due to traders trying to balance a greater-than-expected increase in U.S. crude oil stocks with tightening global supplies.

The price of a barrel fell to $103.58 (0.64%). The barrel price dropped to $108.25

The price of gold was slightly higher. The gold was bought at $1975.21 an troy ounce. [GOL/]