Asia Markets: Asian markets get off to fast start ahead of holiday

Asian stocks opened higher Thursday, following strong overnight gains in the U.S. and Europe, though trading in much of the region should be slow ahead of the Lunar New Year holiday.

Chinese and South Korean markets are closed starting Thursday, joining Taiwan. Hong Kong, Singapore and Malaysia will see only a half-day of trading.

Japanese stocks were higher despite fresh gains for the yen, which had sent the Nikkei Stock Average to four-month lows on both Tuesday and Wednesday. The index NIK, +1.40%   was up 1.6% at midmorning after having fallen in 12 of the prior 15 sessions.

Financials were among the big gainers as U.S. Treasury yields hit fresh multiyear highs Wednesday. That included Dai-ichi Life 8750, +4.08%  , which jumped 3.7% to erase the week’s decline.

The dollar JPYUSD, +0.419486%  , after sliding Wednesday following a stronger-than-expected U.S. consumer inflation report and unexpectedly soft retail sales, was recently at fresh 15-month lows against the yen around ¥106.50.

Australia’s S&P/ASX 200 XJO, +0.91%   rebounded 0.8% as oil logged its best day of the year with a rise of more than 2%. The stock index’s energy component rose nearly 2% to reverse some of this month’s decline.

Hong Kong’s Hang Seng Index HSI, +1.36%   jumped nearly 1.5% in the opening minutes, building on the 3.6% gain of the prior two days.

Following the U.S. inflation data, and the potential implications that has for the pace of Federal Reserve rate increases this year, investors will closely scrutinize speeches late Thursday by policy makers from the European Central Bank to see whether recent market turmoil will convince them to ease off plans to taper their bond purchases, said Société Générale.

“We think they might signal that the recent market turbulence is not a source of concern given the strength of the current expansion,” the investment bank added.

Ten-year Treasury yields were recently at 2.92% while the WSJ Dollar Index fell a further 0.2% in Asian trading. The Fed targets another measure of inflation but the consumer-price index remains closely watched by market participants. Markets sold off sharply earlier this month on fears that higher-than-expected inflation would force the central bank to increase rates more times this year than anticipated.

The Australian dollar has moved back toward session highs after initially falling slightly after the country’s January employment report. A drop in full-time unemployment was more than offset by gains in part-time payrolls.

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