Hong Kong (AFP) - Most Asian stocks rose Friday, tracking a record day on Wall Street, as another soft US inflation reading solidified expectations that the Federal Reserve will hold off hiking interest rates.

The advances came after data showed the producer price index slowed sharply in July and came in below forecasts.

The reading compounded bets on the Fed standing pat at its meeting next month, following the previous day’s consumer price index reading that also pointed to easing inflationary pressure and last Friday’s jobs report showing 23,000 positions were lost in July.

Investors are now pricing in a less than 40 percent chance of a September rate hike, compared with 50 percent last week.

“A few weeks ago, traders were being asked to justify why the Fed should not hike again,” said Stephen Innes, global strategist at Quintex Intel.

“After the latest run of data, the burden of proof has flipped. The market now wants to know what would actually force the Fed to tighten.

“We’ve now had a constructive triple-header of dovish US data: softer payrolls last Friday, an obliging core CPI print, and now a risk-friendly PPI release.

“The disinflation ducks are starting to line up, and with oil also backing off, the market has steadily stripped away the case for another near-term Fed hike.”

However, uncertainty prevails on trading floors as inflation at more than three percent remains well above the Fed’s two percent target, while the Middle East crisis could erupt at any time and send oil prices soaring.

Meanwhile, Cleveland Fed boss Beth Hammack reiterated her view that borrowing costs need to rise despite the latest run of figures.

“I love to see that those numbers are coming in lower… but I don’t have confidence that we’re going to continue to see that, or that we’re going to see them low enough that it’s going to bring us back down to that two percent number,” she said in Ohio on Thursday.

“I think we need to act now,” she added.

That came after she told Yahoo Finance on Monday that “one 25-basis-point move probably doesn’t do a whole lot for the economy. So it’s probably some number of (movements)” but did not want to say where they should land.

For now the softer readings provided a boost to tech firms, which benefit from lower borrowing costs.

Seoul – the poster child of the AI-stoked stock market boom – rallied more than two percent as chipmakers SK hynix and Samsung continued to recover from last month’s selloff.

The Kospi tanked about 40 percent between hitting its June high and August 6 intra-day trough, but has since climbed more than 20 percent.

There were also gains in Tokyo, where tech giants Kioxia, Advantest and Sony spiked along with sector investment titan SoftBank.

Singapore, Jakarta, Bangkok, Manila and Wellington were also up, while Shanghai was barely moved.

However, Hong Kong, Sydney, Taipei and Mumbai slipped.

London fell, Paris was flat and Frankfurt rose.

Crude prices jumped almost two percent – almost wiping out Thursday’s drop – after the United Arab Emirates blamed Teran for attacks on two vessels linked to its state-owned oil company as they passed through the waterway.

The UAE foreign ministry denounced what it called “the hostile Iranian attack” targeting two vessels affiliated with the Abu Dhabi National Oil Company.

The development came as investors await a deal to reopen the Strait of Hormuz amid few signs of movement and the US and Iran exchanging threats.

US Treasury Secretary Scott Bessent on Thursday threatened to subject Tehran to economic isolation “like the world has never seen before”, adding that new measures were expected next week.

- Key figures around 0810 GMT -

Tokyo - Nikkei 225: UP 0.6 percent at 68,713.80 (close)

Hong Kong - Hang Seng Index: DOWN 1.1 percent at 25,116.85 (close)

Shanghai - Composite: FLAT at 3,927.18 (close)

London - FTSE 100: DOWN 0.1 percent at 10,762.68

Euro/dollar: UP at $1.1550 from $1.1528 on Thursday

Pound/dollar: UP at $1.3510 from $1.3486

Dollar/yen: DOWN at 159.25 yen from 159.52 yen

Euro/pound: UP at 85.49 pence from 85.48 pence

West Texas Intermediate: UP 1.9 percent at $82.78 per barrel

Brent North Sea Crude: UP 1.6 percent at $88.42 per barrel