Summary Toyota, Yamaha and Sony each advanced more than one percent in the morning
HONG KONG (AFP) - Signs of a pick-up in US inflation reinforced expectations the Federal Reserve will hike interest rates next month, pushing the dollar higher in Asian trade Wednesday and helping Japanese shares rally for a second day.
Traders are also awaiting the release later in the day of minutes from the US central bank s October policy meeting, hoping for some clues about board members thinking and possible pointers to their plans for next month s gathering.
However, while Tokyo rallied, other regional stock markets were subdued a day after mostly rebounding from Monday s sell-off that was sparked by the Paris terror attacks.
The bloodbath in the French capital Friday raised concerns about security in Europe and the possible effects on the region s economy.
The Fed holds its last policy meeting in mid-December and a recent spate of upbeat data on the world number one economy have fanned speculation it will tighten monetary policy for the first time in almost a decade.
Talk of a hike comes despite a slowdown in the global economies, particularly in China, while the central bank of Japan and Europe consider further stimulus measures.
"The Fed minutes will definitely be focused on tonight," Ric Spooner, chief market analyst at CMC Markets Asia Pacific in Sydney told Bloomberg News.
"There s now an assumption that they are going to make a move in December. The bigger question now is whether they will be able to be as gently paced in their tightening as they plan to be as they monitor wage pressures."
The greenback rose to 123.44 yen while the euro sank to a seven-month low of $1.0637 after data showed inflation at 0.2 percent in October, with pricing of key elements like health care and housing costs pushing higher.
Emerging currencies also retreated as dealers shift into the dollar looking to invest in the United States in search of better and safer returns.
South Korea s won dipped 0.3 percent, the Australian dollar eased 0.1 percent, Indonesia s rupiah shed 0.2 percent and the Malaysian ringgit was 0.2 percent lower.
Japanese exporters were beneficiaries of the weaker yen, which makes their goods cheaper overseas, and helped the Nikkei record a healthy rally.
Toyota, Yamaha and Sony each advanced more than one percent in the morning.
In stock trading Hong Kong and Sydney were both lower, while Shanghai lost 0.3 percent as investors fret over the imminent restart of initial public offerings that they fear will divert cash from established stocks.
The losses came despite another positive performance in European markets, with Paris rallying 2.8 percent and Frankfurt up 2.4 percent. London jumped 2.0 percent.
