In This Article:
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* MSCI ex-Japan climbs 0.9 pct, Nikkei jumps 1 pct
* U.S. April consumer price index rises slower than expected
* Traders trim expectations of faster U.S. rate hikes in 2018
* Risk appetite whetted on U.S.-Korea summit talks in Singapore
By Swati Pandey
SYDNEY, May 11 (Reuters) - Asian shares rallied on Friday as risk appetite got a boost from soft U.S. inflation, helping alleviate worries of faster rate hikes by the Federal Reserve, while investors also cheered U.S.-North Korean steps to further ease tensions on the Korean Peninsula.
Thursday's slower-than-expected April consumer price rises followed payrolls data last week which pointed to sluggish wage growth.
The two data sets meant "inflation may be rising but not so rapidly that the Fed would have to take aggressive actions to keep the economy from overheating," said James McGlew, analyst at Perth-based stock broker Argonaut.
The recent shakeout in markets, partly stoked by Sino-U.S. trade tensions, has also eased off, while money managers expect the relatively low global rates that fuelled the 'goldilocks' boom in stock markets last year will remain in place for some time.
"While inflation is continuing to trend up it's only happening slowly. So Goldilocks continues," Shane Oliver, chief investment manager at AMP, said in a note.
Indeed, a key measure of expected market swings, the Cboe Volatility Index, or VIX, has fallen very close to levels last seen in early January when stock markets were buoyant.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.9 percent to near three-week highs with broad-based gains across all sectors.
Japan's Nikkei climbed 1 percent while South Korea's KOSPI added 0.7 percent. Hong Kong's Hang Seng index jumped 1.4 percent. Chinese shares gave up early gains to be marginally lower.
On Wall Street, the Dow rose 0.8 percent, the Nasdaq Composite gained 0.89 percent and the S&P 500 rose 0.9 percent, surging past key resistance of 2,717 points.
GEOPOLITICS
Investors also appeared to welcome continued moves between the United States and North Korea to reduce tensions in the region.
U.S. President Donald Trump will meet North Korean leader Kim Jong un in Singapore next month amid high hopes of "doing something very meaningful" to curtail Pyongyang's nuclear ambitions.
Concerns still remain around U.S.-China trade skirmishes and rising tensions in the Middle East, although analysts say the June 12 U.S.-Korea summit will ensure the trade war rhetoric takes a back-seat for now.
"Trump still needs President Xi (Jinping) and China's support in dealing with North Korea and this will be his priority in the short term," economists at JPMorgan wrote in a note to clients.