FX.co ★ Japanese Shares Gain on Soft US CPI

The Nikkei 225 Index advanced 1.1% to climb above 68,000 on Thursday, while the broader Topix Index gained 1% to 4,180, with the latter setting a fresh record high. The rally followed softer US inflation data, which reduced near-term pressure on the Federal Reserve to raise interest rates. Markets are now pricing in roughly a 40% probability of a 25 basis point Fed rate hike in September, down from nearly 50% the previous day.

In Japan, producer prices rose 7.2% year-on-year in July, easing slightly from 7.3% in June and undershooting market expectations of 7.4%. Technology and artificial intelligence-related shares led the gains, with notable advances in Kioxia Holdings (up 6.2%), Taiyo Yuden (8.6%), Advantest (5.3%), Ibiden Co. (7.3%) and Murata Manufacturing (7.4%). Bank stocks also traded higher, including Mitsubishi UFJ Financial Group (up 1.6%) and Mizuho Financial Group (1.7%).