Asian markets press on with rally, China fund boosts optimism

HONG KONG, China — Asian stocks extended the week's gains on Thursday, undeterred by forecast-beating US wholesale inflation data as investors grew increasingly hopeful the Federal Reserve would not hike interest rates further.

The mood was enhanced by news that China's massive sovereign wealth fund had bought stakes in the country's biggest banks, fuelling speculation it could broaden its reach to support beleaguered mainland markets.

There has been plenty of optimism on trading floors in recent days after a US jobs report Friday was neither too hot nor too weak, while a string of central bank decision-makers have lined up to suggest they backed a pause in any more monetary tightening.

In the latest remarks, Boston Fed chief Susan Collins said the policy board was being more patient now that rates were at or close to their peak, while Atlanta boss Raphael Bostic said that unless prices surged again, officials did not need to keep hiking.

And Governor Christopher Waller adopted a "watch-and-see" approach.

While the producer price index came in well above estimates Wednesday, analysts said it was seen more as a blip in a generally disinflationary environment.

The main focus is on the release of consumer prices later Thursday.

Wall Street's rise after the PPI contrasts with the risk-off reaction seen in recent months to other above-expectations figures that sparked heavy selling.

Minutes from the Fed's most recent policy meeting showed they would keep rates elevated "for some time" until inflation has been brought to heel.

But while there remains some debate over whether the bank will lift rates again -- they are already at a 22-year high -- or stand still for much of next year, SPI Asset Management's Stephen Innes said one increase was unlikely to have much of an impact.

"Debating whether to fit in one more 25 basis point rate hike in 2023 is little more than a game of trivial pursuits," he said in a note.

"If the Fed's efforts thus far have successfully created a policy stance that's 'sufficiently restrictive' to control inflation, one more 25-basis-point hike won't make a critical difference.

"Conversely, if these efforts haven't controlled inflation by now, it