The Nikkei Index broke through 35,000 points for the first time since 1990! Asian markets rose during Thursday's session. Will there be any movement in the US CPI tonight?

Zhitong App has learned that Asian stock markets rose in early trading on Thursday before the release of US CPI data, which could impact the Fed's view on interest rate cuts. The cryptocurrency sector also received a boost after Bitcoin-tracking exchange-traded funds (ETFs) were approved in the US. The MSCI Asia-Pacific ex-Japan index rose 0.67%, potentially ending a seven-day decline.

Japan's Nikkei index broke through the 35,000-point mark for the first time since February 1990, marking a strong performance at the beginning of this year. The index has risen 28% in 2023, its strongest annual performance in a decade. As of the time of writing, the Nikkei index rose 1.9% to 35,085 points on Thursday. On the other hand, the blue-chip CSI 300 index in China and the Hong Kong Hang Seng index both rose slightly in early trading, with the latter up 1.5%. The US stock market closed higher on Wednesday due to gains in large-cap stocks, but the increase was limited ahead of the release of inflation reports and major bank earnings later this week; S&P 500 E-mini futures rose 0.14%.

Market attention is focused on the US Consumer Price Index (CPI) to be released later on Thursday. Surveys show that the US core CPI for December is expected to remain unchanged at 0.3% on a quarterly basis, while the annual rate is expected to drop from 4% in November to 3.8%.

Ben Bennett, Asia-Pacific investment strategist at Legal and General Investment Management (LGIM), said, "The risk is that the market sells off on strong inflation data. But if we get a soft number, the market reaction could be more muted."

Since the beginning of this year, investors have been reconsidering the magnitude and timing of Fed rate cuts. New York Fed President Williams said on Wednesday that it is still too early to call for rate cuts as the Fed still has a way to go to get inflation back to its 2% target. Fed futures prices indicate that traders expect a 140 basis point rate cut this year, while the expected rate cut at the end of 2023 is 160 basis points. CME FedWatch Tool shows that the market sees a 67% chance of a rate cut in March.

Bennett pointed out that investors are underestimating the risk of an economic downturn in the US; weak CPI data could ultimately be a signal of disappointing demand. But this may take some time.

Investors will also be watching the start of earnings season on Friday, with Wall Street banking giants JPMorgan (JPM.US), Bank of America (BAC.US), Citigroup (C.US), and Wells Fargo (WFC.US) all set to report their earnings on Friday.

Meanwhile, the US Securities and Exchange Commission approved the first batch of Bitcoin-tracking ETFs to be listed in the US on Wednesday evening, marking a milestone for the world's largest cryptocurrency. Most of these products are expected to start trading on Thursday.

Antoni Trenchev, co-founder of cryptocurrency service company Nexo, said that the news of spot ETFs could be the biggest news for Bitcoin since its launch. However, considering the upcoming Bitcoin halving in April, this approval should not be seen in isolation as it will reduce the supply of Bitcoin. From a historical perspective, this will kick off a new bull market. Trenchev said, "These two things combined are likely to make Bitcoin reach $100,000 by 2024."

On Thursday, the price of Bitcoin rose slightly, just above $46,000, a surge of over 70% since October last year, in anticipation of regulatory decisions.

In the foreign exchange market, the yen continues to be under pressure, with the latest USD/JPY rate at 145.35, down 0.9% overnight. Data released on Wednesday showed that real wages for Japanese workers declined for the 20th consecutive month in November, dashing officials' hopes of seeing wage increases before tightening policies. The US dollar and other major currencies remained stable ahead of the release of the inflation report in the United States.

US crude oil futures rose 0.32% to $71.60 per barrel, while Brent crude oil futures rose 0.3% to $77.03 per barrel. The previous trading day, concerns about the demand for the world's largest oil market were raised due to an unexpected surge in US crude oil inventories, causing Brent crude oil futures to fall by nearly $1.