Asian Stocks Inch Higher Ahead of Key U.S. Inflation Report

Asian Stocks Inch Higher Ahead of Key U.S. Inflation Report

Asian stocks saw a modest increase on Tuesday, as investors awaited the release of a crucial U.S. inflation report. The report, expected later in the day, could heavily influence the Federal Reserve's outlook on interest rates and determine the timing of potential cuts.

Amidst the anticipation, Bitcoin continued to hold strong, having recently surpassed $50,000 for the first time in over two years. This surge is attributed to increased inflows into exchange traded funds backed by the digital asset.

The MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.15% in early trading, despite being down 3% so far for the year. In contrast, Japan's Nikkei index has performed exceptionally well, climbing 1.7% on Tuesday to reach a fresh 34-year high. This rally is partly due to the weak yen, which has approached the significant 150 level per dollar.

Chinese financial markets remained closed for the Lunar New Year holiday, while Hong Kong markets will resume trading on February 14th. Thus, trading activity in Asia was relatively muted, with participants closely monitoring cues from Wall Street.