Asian investors moved tentatively on Thursday as they jostle ahead of the release of US inflation data later in the day that could have a huge bearing on the Federal Reserve's rate hike plans.

A broadly positive week for global equities continued on Wednesday thanks to some healthy earnings results, the further reopening of economies and signs of an easing in Russia-Ukraine tensions.

While the mood for now is positive, nerves are on edge as the US consumer price index figures come up for release.

Commentators warn that a reading above the forecast 7.2 percent -- which would be a new four-decade high -- would pressure the Fed to act more aggressively to rein in prices.

Some Fed officials on Wednesday said policymakers would make their decisions based on data coming across their desks, with a 50 basis point hike -- as opposed to the usual 25 basis points -- was not off the table just yet.

Surging inflation and bets that the US central bank will end its pandemic-era cheap cash policies have weighed on world markets in recent months, stalling a two-year rally that saw them hit record or multi-year highs.

But there is a feeling in some quarters that investors may be getting used to the prospect of higher borrowing costs, while still strong economic data and the easing of containment measures will continue to support company earnings.

"While uncertainty remains as to the course of inflation, particularly wages, and interest rates in the months ahead given the planned tightening by the Fed is essentially new ground... historically economies have grown in much higher interest rate environments," said markets strategist Louis Navellier.

"Why is the market rallying when we're about to get hit with that horrible inflation news tomorrow? In a word: earnings. They're much better than anyone anticipated. So the surprises are huge and the guidance, by and large, is great."

All three main indexes on Wall Street chalked up strong gains Wednesday, while London, Paris and Frankfurt piled on more than one percent apiece.

But Asia struggled to build on its own rally, with regional markets fluctuating in the morning.

Tokyo, Shanghai, Sydney, Wellington, Taipei and Jakarta rose but Hong Kong, Singapore, Seoul and Manila were in the red.

There is a general consensus that the outlook for the global economy is positive and markets will recover as inflation is brought under control thanks to easing supply snarls but some observers remain cautious.

"The market is being somewhat sanguine about what will happen in the second half of 2022," Sonal Desai, of Franklin Templeton Fixed Income, said.

"There is an expectation that inflation will decline sharply. I think that might be optimistic because a lot of the factors driving inflation will still be with us. The Fed is already behind the curve."

Still, concerns over the stand-off between Russia and Ukraine appeared to be easing after French President Emmanuel Macron said Russian counterpart Vladimir Putin had told him that Moscow "would not be the source of an escalation".

While the West accuses Russia of having massed 100,000 soldiers near Ukraine's borders, Kyiv's Foreign Minister Dmytro Kuleba said "diplomacy is continuing to lower tensions".

Meanwhile, Kremlin spokesman Dmitry Peskov said "there were positive signals that a solution to Ukraine could be based only on fulfilling the Minsk agreements", which ended the worst of the fighting in 2014 between Ukraine and Russian-backed separatists.

Signs of progress on the diplomatic front in Eastern Europe have kept a cap on oil prices in recent days, as has the possibility of a revived Iran nuclear deal, which could see Tehran resume worldwide exports and ease supply problems.

Both main contracts were slightly lower Thursday, having rallied this year to their highest levels since 2014.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 0.1 percent at 27,598.11 (break)

Hong Kong - Hang Seng Index: DOWN 0.2 percent at 24,780.00

Shanghai - Composite: UP 0.1 percent at 3,484.26

Euro/dollar: DOWN at $1.1423 from $1.1425 late Wednesday

Pound/dollar: DOWN at $1.3533 from $1.3535

Euro/pound: UP at 84.42 pence from 84.40 pence

Dollar/yen: UP at 115.54 from 115.52 yen

West Texas Intermediate: DOWN 0.2 percent at $89.47

Brent North Sea crude: DOWN 0.3 percent at $91.28 per barrel

New York - Dow: UP 0.9 percent at 35,768.06 (close)

London - FTSE 100: UP 1.0 percent at 7,643.42 (close)

-- Bloomberg News contributed to this story --

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Markets rally as traders brace for US inflation data
Hong Kong (AFP) Feb 9, 2022
Equity markets rose Wednesday following a positive performance on Wall Street as traders prepared for the release of highly anticipated US inflation data, while sentiment was also buoyed by signs of easing Russia-Ukraine tensions. Oil prices also enjoyed a small bounce on demand optimism after two days of losses fuelled by the positive vibes from Eastern Europe and as talks on an Iran nuclear deal appear to be progressing. With speculation swirling over the Federal Reserve's plans to battle soar ... read more