Indonesia's benchmark stock index, the IHSG, closed higher on Wednesday as investors digested new US inflation data that came in cooler than expected.
The softer print has significantly reduced market expectations for further interest rate hikes by the Federal Reserve, providing a tailwind for emerging-market assets sensitive to US monetary policy shifts.
The rally in Jakarta reflects a broader repricing of risk assets following the latest macroeconomic signals from the United States.
With the threat of additional tightening by the Fed receding, capital flows into higher-yielding markets have gained momentum.
The positive sentiment was evident across the board, with the IHSG posting gains as traders adjusted their positioning in anticipation of a more accommodative policy environment in the world's largest economy.
This development follows a series of softer-than-expected US economic data releases that have collectively tempered inflation concerns.