(Bloomberg) -- Shares look set to advance in Asia following a rally on Wall Street as traders position for US inflation data later Tuesday that might not be as bad as once feared.

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Equities were higher in Australia while futures for Japan and Hong Kong rose and an index of US-listed Chinese stocks jumped the most in almost two weeks.

The S&P 500 added 1.1% and the tech-heavy Nasdaq 100 climbed 1.6% after a survey showed Americans drastically reduced their expectations for household income growth amid tighter monetary policy.

Investors will also be focused on the nomination of the next Bank of Japan governor as bets increase that yield-curve control may be abolished soon under the new leadership of Kazuo Ueda. The benchmark 10-year yield is sitting hard against the BOJ’s 0.5% ceiling.

The yen, which has appreciated steeply since late October, weakened against the dollar on Monday. It was little changed in early trading on Tuesday. A gauge of greenback strength slipped on Monday and 10-year US Treasury yields fell slightly.

Meanwhile, the Hong Kong Monetary Authority bought the local currency for the first time since November to manage its peg to the dollar. Late last week, the Hong Kong dollar touched the weak end of its 7.75-7.85 trading band versus the greenback, increasing the likelihood of government intervention.

Supporting stocks overnight was the New York Federal Reserve consumer survey, which showed that one-year inflation expectations were little changed in January. This was “modestly reassuring,” according to Vital Knowledge’s Adam Crisafulli.

US inflation probably accelerated in January to 0.5% from December’s 0.1%, while slowing year on year to 6.2% from 6.5%, according to estimates compiled by Bloomberg.

Oil prices, a key inflation component, fell on a report that the Biden administration plans to sell more crude oil from the Strategic Petroleum Reserve.

Still, JPMorgan Chase & Co.’s Marko Kolanovic said that investors should be in bonds since “a recession is currently not priced into equity markets.” Morgan Stanley’s Michael Wilson argued that US stocks are ripe for a selloff after prematurely pricing in a pause in Fed rate hikes.

Traders are also keeping a keen eye on geopolitical developments after the Pentagon shot down an unidentified object that it tracked over Michigan, according to US officials familiar with the matter. This was the fourth time in eight days a balloon or high-flying craft has been shot down over the US or Canada.

Key events:

• Japan’s new BOJ governor nomination Tuesday

• US CPI, UK jobless claims, Eurozone GDP, New York Fed President John Williams gives the keynote speech at New York Bankers Association event Tuesday

• US retail sales, UK CPI Wednesday

• US jobless claims, Australia unemployment, Cleveland Fed President Loretta Mester speaks at Global Interdependence Center event Thursday

• France CPI, Russia GDP Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 8:14 a.m. Tokyo time. The S&P 500 closed up 1.1%

• Nasdaq 100 futures were little changed. The Nasdaq 100 closed up 1.6%

• Australia’s S&P/ASX 200 Index rose 0.6%

• Nikkei 225 futures rose 0.9%

• Hang Seng Index futures rose 0.8%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2% on Monday

• The euro was little changed at $1.0724

• The Japanese yen was little changed at 132.38 per dollar

• The offshore yuan was little changed at 6.8229 per dollar

• The Australian dollar was little changed at $0.6965

Cryptocurrencies

• Bitcoin rose 0.4% to $21,712.53

• Ether rose 0.7% to $1,496.69

Bonds

• The yield on 10-year Treasuries declined three basis points to 3.70%

• Australia’s 10-year yield was little changed at 3.75%

Commodities

• West Texas Intermediate crude fell 1.1% to $79.29 a barrel

• Spot gold was unchanged at $1,853.49 an ounce

This story was produced with the assistance of Bloomberg Automation.

--With assistance from Isabelle Lee.

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