Japan’s benchmark stock market index has topped its all-time high for a second straight day amid expectations of an interest rate cut in the United States and easing trade tensions between Washington and Beijing.
The Nikkei 225 rose above 43,421 points on Wednesday after better-than-expected US inflation data bolstered the case for a rate cut by the US Federal Reserve at its next committee meeting in September.
The milestone came after the Nikkei on Tuesday breached the 42,999-point mark for the first time.
In the US, the benchmark S&P 500 and tech-heavy Nasdaq Composite also closed at record highs on Tuesday after rising 1.13 percent and 1.39 percent respectively, as investors cheered the latest inflation data release, which showed consumer prices rising a lower-than-expected 2.7 percent in July.
The inflation data added to a positive turn in investor sentiment following US President Donald Trump’s announcement on Monday of a 90-day extension of his pause on crippling tariffs on Chinese goods.
Other Asian stock markets also racked up big gains on Wednesday, with Hong Kong’s Hang Seng Index and South Korea’s KOSPI rising about 2.50 percent and 1 percent, respectively.
The Fed and its chair, Jerome Powell, have for months been under intense pressure from Trump to lower interest rates.
A cut in the benchmark rate would deliver a boost to the US economy, the biggest driver of global growth, by lowering borrowing costs for American households and businesses.
But the Fed has been reluctant to cut the rate due to concerns it could stoke inflation at a time when Trump’s sweeping tariffs are already putting pressure on prices.
“Jerome ‘Too Late’ Powell must NOW lower the rate,” Trump said in a post on Truth Social on Tuesday, claiming that the Fed chair had done “incalculable” damage to the economy by not lowering borrowing costs.
On Tuesday, CME Group’s FedWatch tool raised the likelihood of a September rate cut to 96.4 percent, up from 85.9 percent the previous day.
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