Asian stocks extend gains despite hawkish Fed

• Nikkei is on the front foot in the heals of US risk appetite.
• Wall Street Journal live event were some of his most hawkish comments from the Fed so far.

Asia-Pac stock markets and risk appetite are higher on Wednesday as the region takes impetus from the gains across global peers. In Japan, the Nikkei 225 opened evenly the prior day and rose to the close, finishing up 0.4% yesterday and has started the day over 1% higher today. 

A softer yen against the US dollar boosted export issues while Asian stock markets have tracked higher on the outlook that Beijing will ease both anti-pandemic lockdowns and regulations upon the nation's tech industry. Overnight, risk appetite in the US was helped by Industrial Production and Retail Sales data, leading the way for a positive start in Asia. 

Overnight, the Federal Reserve Jerome Powell said that the US central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat. The remarks at a Wall Street Journal live event were some of his most hawkish so far yet the markets were relieved that nothing more hawkish was stated, such as the prospects of 75bps hikes in the coming meetings. If the economy performs as expected, 50bp hikes remain on the table.

Powell does see upside wage inflation risks, and he reiterated that the FOMC needs "to see inflation coming down in a clear and convincing way and we're going to keep pushing until we see that. If that involves moving past broadly understood levels of neutral we won't hesitate at all to do that."