Asia rides Wall St rally, dollar sags on inflation relief

Asian stock markets rallied on Thursday, buoyed by Wall Street’s surge to all-time peaks overnight after a milder U.S. inflation report raised expectations the Federal Reserve will deliver two interest rate cuts this year, Reuters reported.

The dollar remained on the back foot, sagging to fresh multi-week lows against peers including the euro and sterling.

U.S. Treasury yields extended their retreat in Tokyo trading, sinking to six-week troughs. That helped the beaten-down yen to continue its recovery, even as data showed the Japanese economy contracted more than expected in the first quarter.

Gold marched back toward record levels and crude oil added to gains after rebounding strongly overnight from a two-month trough.