Asian shares gained in early trading on Friday, on track for a weekly rise, after Wall Street cheered a cool reading for producer price inflation that chilled expectations of a Federal Reserve rate hike. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was 0.3 percent higher, poised to gain about 1 percent for the week. Japan’s Nikkei stock index .N225 was up 0.5 percent, set for a 1.5 percent weekly rise.
On Wall Street, all three major indexes gained more than one percent, and the S&P 500 .SPX closed at a record. A spate of U.S. economic data painted an improving employment picture, but subdued producer price inflation quashed bets that the U.S. central bank would raise interest rates sooner rather than later this year.
“We never expected the Fed to tighten next month but we were hoping that they would set the stage for a move in September.” said Kathy Lien, managing director at BK Asset Management in New York. “However if data continues to miss, they may refrain from signaling a change in monetary policy three months forward,” she said in a note to clients.