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Fed rate cut expected, boosting Wall Street and Asian

markets

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U.S. inflation data below expectations, easing stagflation

fears

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Nikkei hits new high, breaches 43,000

By Rocky Swift

TOKYO, Aug 13 (Reuters) - Stocks in Asia climbed and the

U.S. dollar was subdued on Wednesday, as data showed both

resilience in major economies and the need for central banks to

remain accommodative.

Wall Street scaled new heights on Tuesday, driven by

increasing certainty the Federal Reserve will cut interest rates

next month. Japan's Nikkei broke through the 43,000 level for

the first time and cryptocurrency ether rose to an almost

four-year high.

The highly-anticipated U.S. inflation readings indicated

President Donald Trump's tariff regime had yet to filter down to

consumer prices. In Japan, a report showed manufacturers grew

more confident about business conditions after a trade agreement

with the United States.

"It's clear that almost any good news leads investors to

pile money into markets, particularly tech stocks, despite their

lofty price tags," Paco Chow, dealing manager at Moomoo

Australia and New Zealand, wrote in a note to clients.

"They're riding on 95% odds of a Fed rate cut in five weeks

and feeling comfort that inflation is only creeping higher, not

running amok," Chow said.

The MSCI All Country World Index of shares

climbed for a second day to reach 948.54, a new all-time high.

Japan's Nikkei stock index rose 1.4%, also setting a new

peak for a second-straight session.

U.S. Labor Department data showed the consumer price index

rose 2.7% in the 12 months through July, slightly below the 2.8%

rate that economists polled by Reuters had forecast.

A Reuters Tankan poll that tracks the Bank of Japan's quarterly

tankan business survey showed Japanese manufacturers' sentiment

index improved for a second straight month. Another report

showed Japan's wholesale inflation slowed in July, underscoring

the central bank's view that upward price pressure from raw

material costs will dissipate.

On Wall Street, the benchmark S&P 500 and the Nasdaq hit record

highs after President Trump signed an executive order pausing

triple-digit levies on Chinese imports for another 90 days.

Traders are pricing in a 94% chance of a Fed cut in

September, up from nearly 86% a day ago and about 57% a month

earlier, according to the CME FedWatch tool.

Investors had been on tenterhooks about the inflation data

because it followed a surprisingly weak jobs report on August 1

and had the potential to stoke concerns about stagflation.

Trump has nominated White House adviser Stephen Miran to

temporarily fill a vacant board seat at the U.S. central bank,

stirring up speculation about presidential interference in

monetary policy.

And the White House said it was "the plan" that the Bureau of

Labor Statistics would continue to publish its closely watched

monthly employment report after Trump's pick to head the agency

E.J. Antoni proposed suspending its release.

Speculation the labour report would be halted has "done the

USD no favours and would have only incentivised foreign

investors to review their hedging ratios on U.S. investments,"

Chris Weston, head of research at Pepperstone, said in a note.

The dollar was little changed at 147.84 yen. The euro

edged up 0.1% to $1.1684, after a 0.5% jump in the

previous session. The dollar index, which tracks the

greenback against a basket of major peers, slid for a second

day.

Ether touched $4,634.70, the highest since December 2021,

in early trading before sliding 0.9%.

U.S. crude dipped 0.05% to $63.14 a barrel. Spot gold

was little changed at $3,348.1 per ounce.

In early trade, pan-region Euro Stoxx 50 futures were

up 0.2%, German DAX futures rose 0.3% and FTSE futures

climbed 0.1%. U.S. stock futures, the S&P 500 e-minis

, were little changed.

(Editing by Jacqueline Wong)