Japan's Nikkei 225 rises more than 1%; Fed's Powell vows tough action on inflation

SINGAPORE — Shares in Asia-Pacific rose in Tuesday morning trade, with investors watching for market reaction to comments by U.S. Federal Reserve Chairman Jerome Powell vowing tough action on inflation.

The Nikkei 225 in Japan jumped 1.23% in early trade while the Topix index climbed 1.14%.

South Korea's Kospi advanced 0.32%. In Australia, the S&P/ASX 200 gained about 1% in morning trade.

MSCI's broadest index of Asia-Pacific shares outside Japan traded 0.15% higher.

Investors will watch shares of China Eastern Airlines in Hong Kong, after the carrier's Boeing 737 passenger jet crashed in southern China on Monday.

Fed Chair Powell said Monday that inflation is "much too high," with the central bank set to "take the necessary steps to ensure a return to price stability."

"In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so," Powell said.

Those comments came less than a week after the central bank raised interest rates for the first time in more than three years.

Powell's messaging "could not be clearer," according to National Australia Bank's Ray Attrill.

"The US Fed Funds futures now has 42bps of tightening priced for May up from 3.5bps at Friday's close, and 80bps over the combined May-June meetings, so now flirting with the notion of back-to-back 50 point increases," Attrill said.

Shares on Wall Street dipped overnight, with the S&P 500 fractionally lower at 4,461.18 while the Dow Jones Industrial Average slipped 201.94 points to 34,552.99. The Nasdaq Composite shed 0.4% to 13,838.46.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.486 — still off levels below 98 seen last week.

The Japanese yen traded at 119.66 per dollar, weaker than levels below 118.3 seen against the greenback last week. The Australian dollar was at $0.7393, largely holding on to gains following its rise from below $0.72 last week.