Nikkei closed at a two-week high amid hopes of a slowdown in US interest rate hikes

Japan’s Nikkei average closed at a two-week high on Wednesday, tracking Wall Street’s gains as lower-than-expected US inflation data reinforced expectations that the Federal Reserve may ease the pace of interest rate hikes.

The Nikkei rose 0.72% to 28,156.21, its highest close since December 1. The broader Topix index rose 0.6 percent to 1,977.42.

US stocks rose overnight on Tuesday after a small unexpected increase in consumer prices boosted optimism that the Federal Reserve would soon reverse its decisions to raise interest rates to curb inflation.

Big tech companies led the Nikkei index higher, with chipmaker Tokyo Electron Co rising 1.9 percent, giving the index the biggest boost.

The aviation sector was the biggest loser among the industrial groups on the stock exchange, which fell 0.9 percent.