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By Katanga Johnson
WASHINGTON (Reuters) -Global investor optimism lifted shares on Wednesday despite blurry inflation forecasts as bank earnings and oil supply concerns boosted trading sentiment.
The Japanese yen weakened past the 126 yen per dollar mark on Wednesday for the first time since 2002, while the euro was pinned at a one-month low as investors bought the U.S. currency after hawkish comments by Federal Reserve officials.
The prospect of fast and aggressive U.S. interest rate hikes and growing market expectations that the Bank of Japan will keep rates ultra-low in the near term have fueled the Japanese currency's declines against the dollar.
Meanwhile, U.S. Treasury yields fell - and data on inflation did not dissuade investors from believing that inflation may have peaked.
The pan-European STOXX 600 index rose 0.03% and MSCI's gauge of stocks across the globe gained 0.79%.
Equity markets have suffered from hawkish moves from the world's top central banks in response to inflation, analysts said.
But data on Wednesday showed no let-up for Britain after inflation hit a 30-year high of 7%, although this came a day after a lower-than-expected U.S. print had given some traders cause to hope policy would be tightened more slowly.
"Another month, another jump in inflation figures around the world," said Oliver Blackbourn, portfolio manager at asset manager Janus Henderson.
"The increase in prices further ratchets up the pressure on the Bank of England to respond to dampen the squeeze on real incomes. However, fading growth forecasts show the danger to the economy from tightening too quickly or too far."
On Wall Street, the Dow Jones Industrial Average rose 0.74%, the S&P 500 gained 0.89% and the Nasdaq Composite added 1.75%.
Investors, poised for lackluster earning results from the largest U.S. banks, have been eyeing investment banking revenue, which has stalled after the Russian invasion of Ukraine in late February. In the first quarter, the total value of pending and completed deals fell to its lowest since the second quarter of 2020, according to Refinitiv data.
Overnight in Asia, much weaker-than-expected import data from China weighed on the outlook, but added to views that Beijing could ease policy further, helping MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.89% higher.
Japan also posted weak machinery orders data, although its stocks closed higher on the U.S. inflation data that had shown consumer prices rose by the most in 16-1/2 years in March as war in Ukraine boosted the cost of gasoline to record highs, although underlying inflation pressures moderated.