Volkswacht Bodensee - Asian markets mixed as traders return, eyes on US data

Traders are hoping the consumer price index reading shows a continued downward trend, which would give the Federal Reserve room to lower interest rates.

However, there is resignation on trading floors that a March cut is out of the question after decision-makers warned they wanted to see more positive indicators, with May now tipped as seeing the first shift downward.

The CPI report is forecast to come in below three percent on-year for the first time since March 2021, according to Bloomberg News.

Expectations inflation will come down to the Fed's two-percent target this year, allowing the bank to ease monetary policy, have been a key driver of a market rally that has pushed the Dow and S&P 500 to multiple records this year.

However, some observers pointed out that there could be an upward surprise as many businesses had lifted prices to boost their margins.

SPI Asset Management's Stephen Innes added: "The dreaded top side beat would throw ice water on the easing inflation story, send May cut probability tumbling south of 50 percent and upend a stock market rally looking for more boost juice from a dovish Fed.

"The US isn't out of the woods yet on the inflation front, even if markets are keen to pretend otherwise."

As most of the region returned to work after a long weekend in several countries, Tokyo led advances thanks to a surge in SoftBank, which was boosted by another blockbuster day for its US-listed unit Arm.

Arm has almost doubled in value in the past week -- and trebled since its September listing -- owing to healthy demand for chips fuelled by an expected boom in artificial intelligence.

There were also gains in Seoul, Mumbai, Bangkok and Manila, but Sydney, Singapore, Jakarta and Wellington fell.

Hong Kong, Shanghai and Taipei remained closed for the Lunar New Year break.

The gains in Asia came after the Dow chalked up a new record high, though the S&P 500 edged down after hitting an all-time peak Friday. The Nasdaq was also slightly off.

Bitcoin topped $50,000 for the first time since late 2021 as investors grow optimistic that US approval of broader trading in the unit will ramp up demand.

The cryptocurrency has enjoyed a strong run in recent months, fuelled by expectations US lawmakers would allow the creation of exchange-traded funds (ETFs) that track the price and let the public invest in crypto without directly purchasing it.

After initially dropping in reaction to last month's green light by Washington, bitcoin has rallied about 25 percent since January 22.

That advance saw it hit as much as $50,328, according to Bloomberg data, its highest level since late 2021. In afternoon Asian trade it was sitting at $50,050.

And observers were optimistic about the outlook.

"Enthusiast buyers bring in more enthusiast buyers pushing prices further up," Fadi Aboualfa, of Copper Technologies, said.

"The cryptocurrency has momentum on the back of several green weeks and has a large chance of going up further when markets see weekly movements upwards of 10 percent (as we saw last week)."

- Key figures around 0600 GMT -

Tokyo - Nikkei 225: UP 2.9 percent at 37,963.97 (close)

Hong Kong - Hang Seng Index: Closed for holiday

Shanghai - Composite: Closed for holiday

Euro/dollar: DOWN at $1.0767 from $1.0776 on Monday

Dollar/yen: UP at 149.52 yen from 149.33 yen

Pound/dollar: DOWN at $1.2617 from $1.2630

Euro/pound: UP at 85.35 pence from 85.29 pence

West Texas Intermediate: UP 0.2 percent at $77.07 per barrel

Brent North Sea Crude: UP 0.1 percent at $82.09 per barrel

New York - Dow: UP 0.3 percent at 38,797.38 (close)

London - FTSE 100: FLAT at 7,573.69 (close)

-- Bloomberg News contributed to this story --

T.Germann--VB