Jakarta. Indonesian stocks closed modestly higher on Wednesday as softer-than-expected US inflation boosted sentiment across Asian markets, while the government's pledge to keep tax rates unchanged added support to domestic equities despite lingering geopolitical risks.

The Jakarta Composite Index (JCI) rose 2.4 points, or 0.20%, to close at 6,041 after trading between 6,007 and 6,081.

According to RTI Data, trading volume reached 25 billion shares with a turnover of Rp 11.6 trillion ($642 million) across more than 2 million transactions. Gainers outnumbered losers, with 334 stocks advancing, 285 declining, and 195 unchanged.

Pilarmas Investindo Sekuritas said the JCI's gains mirrored most Asian markets after US inflation came in below market expectations.

"Annual US inflation eased to 3.5% in June from 4.2% in May, below the market's expectation of 3.8%. This has eased expectations that the Federal Reserve will tighten monetary policy in the near term," Pilarmas wrote in a research note on Wednesday.

The brokerage said investors remain focused on the Fed's policy path after Chairman Kevin Warsh reiterated the central bank's commitment to price stability without signaling a more aggressive monetary stance.

Pilarmas added that markets are still pricing in roughly a 50% chance of another Fed rate hike in September, particularly as rising tensions between the US and Iran have pushed oil prices higher and kept inflation risks elevated.

Domestic sentiment also improved after the government reaffirmed it would not raise tax rates to boost state revenue. According to Pilarmas, the decision reduces the risk of higher tax burdens for businesses and helps preserve corporate competitiveness.

"The government's focus on broadening the tax base through stronger compliance and digitalization is viewed as more supportive of economic growth than increasing tax rates," the brokerage said.

Across the region, Asian markets mostly advanced after Wall Street rallied on the cooler US inflation data.

South Korea's Kospi jumped 6.2% to 7,284 as semiconductor stocks rebounded from a recent sell-off. SK Hynix soared 9.4%, while Samsung Electronics gained 6.1%.

Japan's Nikkei 225 rose 1.3% to 68,613, while Hong Kong's Hang Seng climbed 1.5% to 24,701. China's Shanghai Composite slipped 0.2% to 3,957 after official data showed the economy expanded at an annualized 4.3% in the second quarter, slowing from 5% in the first quarter.

Market gains remained restrained as investors continued to monitor escalating tensions between the US and Iran, which have renewed concerns over potential disruptions to oil and gas shipments through the Strait of Hormuz and lifted global oil prices.

On Wall Street overnight, the S&P 500 rose 0.4% to 7,543.59, recovering part of the previous session's decline. The Dow Jones Industrial Average added less than 0.1% to 52,508.27, while the Nasdaq Composite gained 0.9% to 26,107.