HONG KONG, Sept 18 — Asian stocks rose today in line with a rally on Wall Street as a drop in oil prices eased inflation concerns, while investors were awaiting a Bank of Japan interest rate decision later in the day.

The Federal Reserve’s hike in borrowing costs this week provided some relief to traders concerned that policymakers were not moving quick enough to address a spike in inflation that could deal a blow to the world’s top economy.

That has been helped by news that Saudi Arabia was moving to restore within days about half of crude shipments disrupted by the stoppage of its East-West pipeline to the Red Sea.

The conduit, even more important since the effective closure of the Strait of Hormuz by Iran, was shut last week after being targeted by Yemen’s Iran-backed Houthis.

Crude prices, which had soared around a fifth in September, have fallen around five per cent from recent highs, with West Texas Intermediate dipping below US$100 (RM409) for the first time since Friday.

The surge in oil has been among the main catalysts for rising inflation since the United States and Israel began their war on Iran at the end of February.

And the latest fall-off provided some much-needed support to stocks.

Seoul, Tokyo, Hong Kong, Shanghai, Sydney and Taipei all advanced though there were small losses in Singapore, Wellington and Manila.

The latest moves in oil and the Fed’s action reassured investors and kept the 10-year US Treasury bond yield — a key indicator of borrowing costs throughout the world’s biggest economy — back below five per cent.

On currency markets the yen slipped against the dollar ahead of the BoJ announcement, which is widely expected to be a 25-basis-point hike in interest rates.

But analysts said that with the lift already factored in, the focus will be on what is said afterwards.

“Given the degree of pricing, the rate decision itself may have limited impact on the yen,” said Chris Weston at Pepperstone.

“Instead, attention should fall on the forward swaps curve and the Bank’s guidance around the pace and urgency of further tightening. Governor (Kazuo) Ueda’s press conference will therefore be key.

“The market will be looking for confirmation that further normalisation remains firmly on the table, while assessing whether the Bank sees any urgency to move again.”

Key figures at around 0200 GMT 

Tokyo — Nikkei 225: UP 0.7 per cent at 64554.64 (break)

Hong Kong — Hang Seng Index: UP 0.9 per cent at 24,834.41

Shanghai — Composite: UP 0.8 per cent at 3,907.64

Dollar/yen: UP at 156.28 yen from 155.96 yen on Thursday

Euro/dollar: DOWN at US$1.1478 from US$1.1480

Pound/dollar: UP at US$1.3359 from US$1.3358

Euro/pound: DOWN at 85.93 pence from 85.94 pence

West Texas Intermediate: DOWN 0.7 per cent at US$101.23 per barrel 

Brent North Sea Crude: DOWN 0.8 per cent at US$104.03 per barrel 

New York — Dow: UP 0.6 per cent at 51,778.04 (close)

London — FTSE 100: UP 1.2 per cent at 10,816.14 (close) — AFP