Asian stocks made gains on Thursday as new data from the United States indicated a cooling of inflation, diminishing the chances of a Federal Reserve rate hike next month. This development has added optimism in the markets, though oil prices weakened on concerns over demand.

The broader Asia-Pacific stock index outside Japan rose by over 1%, with significant contributions from South Korean stocks, which increased by 3.78%. Meanwhile, Japan’s Nikkei index saw a 1.67% boost, driven by strong earnings expectations and activity in chip-related stocks.

U.S. consumer prices reported only a modest rise of 0.1% in July, aligning with predictions and possibly reducing the likelihood of a near-term interest rate decision from the Fed. However, tensions between Iran and the U.S. continue to affect economic conditions, as efforts to agree on peace terms remain stagnant.

(With inputs from agencies.)