Asia wrap: The dovish beat marches on

Asia stocks continue to dance to the same tune Wall Street’s been humming, letting the Fed’s dovish backbeat set the tempo as tech names keep strumming the lead. Oracle’s thunderclap in U.S. after-hours — record bookings, cloud euphoria — set the riff that carried across the Pacific. By the time the lights came up in Seoul, Samsung and SK Hynix were already shredding the next verse, pushing the Kospi toward fresh highs. Tokyo and Hong Kong swayed along, and MSCI Asia-Pac marked its fifth straight gain.

The Fed put remains the chorus. Cooling labour prints, messy and endlessly revised, are being heard as softer notes that justify three cuts before year-end. Traders know revisions are pro-cyclical — uglier into recessions, rosier into recoveries — so each rewrite of the past shifts the future tempo. Right now, the band is playing an extended-cycle ballad, liquidity spilling like amplifiers turned too loud, until inflation decides to crash the set.

And inflation is the real cymbal waiting to smash. CPI and PPI are this week’s headline acts, and a hot print would likely take the 50-bp encore off the table, forcing Powell to keep the band on a steadier 25-bp groove. The dollar has stepped back from the abyss for now, but the risk of a harsher tune lingers if the data swings too far in either direction.

Oil added its own drumbeat after an Israeli strike in Qatar, reminding markets that geopolitics can yank traders off rhythm in an instant. Meanwhile, the yen slipped back after Tuesday’s BOJ bounce, with whispers of another rate hike still circling despite Tokyo’s political noise.

Across the floor, the house lights are still on, the music is still dovish, and AI remains the lead guitar. But everyone in the room knows — the next inflation print will decide whether this rally keeps dancing or whether the Fed has to change to a less dovish tune.