Equities surged Wednesday and the dollar struggled after slower-than-forecast US inflation was seen as all but putting to bed any chance of another interest rate hike, and even allowed traders to bet on a series of cuts in the new year.

Investors built on a strong performance on Wall Street — where US Treasury yields also sank — fuelled by a sense of relief sweeping through markets that more than a year of painful tightening may have finally come to an end.

The 3.3 percent reading in the October consumer price index was well down from the 3.7 percent seen in the previous month and 0.1 percentage point below what was expected. Core inflation was also below estimates.

Several Fed officials have lined up in recent months to warn that while inflation has come down from the multi-decade peaks of last year, it remained too high to give up on their rate-hike campaign for fear of prices reflating.

But the latest figures will embolden traders, who are skeptical that the central bank will act on any hawkish instincts for fear of tipping the economy into recession.

Data suggests they are now betting on as much as a one percentage point cut in rates through next year.

"The fact that the US Fed seems to be done with rates and inflation is behind us for now is definitely a positive for all risky assets," Pooja Malik, of Nipun Capital, told Bloomberg Television, but she warned of the possibility of more volatility over the next 12-18 months.

After Wall Street's rally that saw the Nasdaq jump more than two percent and the S&P 1.9 percent, Asia picked up the baton.

Tech giants helped push Hong Kong more than two percent higher, Tokyo added two percent, while Sydney, Seoul, Wellington, Taipei, and Jakarta were all up more than one percent.

Shanghai, Singapore, and Manila were also in positive territory.

The dollar remained under pressure, having dropped against its major peers, though the yen's rally was tempered by news that Japan's economy shrank more than forecast in the third quarter.