Asian markets are mostly higher, following Wall Street gains

TOKYO – Stocks rose in Asia on Friday after news out of the US Consumer inflation slowed The past month has pushed Wall Street benchmarks higher.

Tokyo’s Nikkei 225 index fell 1.3% to 26,119.52 on speculation that the Bank of Japan may ease and tighten its ultra-loose monetary policy as the 10-year Japanese government bond yield surged above the central bank’s ceiling on pending strong selling down by 0.5% at next week’s policy-setting meeting.

The BOJ kept interest rates on hold at minus 0.1%, claiming that downward pressure from a likely recession poses a greater risk than inflation, which has remained at relatively moderate levels in Japan.

Fast Retailing, which soared earlier in the week on news that wages would rise by as much as 40%, fell 6.4% after the company reported weaker-than-expected earnings in the previous quarter.

China reported its trade surplus rose to a record $877.6 billion in 2022 as exports rose 7%, despite weaker demand in the U.S. and Europe and antivirus controls that temporarily shut down Shanghai and other industrial hubs. The country’s politically sensitive trade surplus rose 29.7% from a record set in 2021, already the highest ever for an economy.

Hong Kong’s Hang Seng rose 0.5% to 21,621.96 and the Shanghai Composite Index rose 0.5% to 3,180.27. Seoul’s Kospi rose 0.4% to 2,388.58, while Australia’s S&P/ASX 200 rose 0.7% to 7,328.10.

Taiwan’s benchmark gained 0.6% while Bangkok’s SET fell 0.7%.

On Thursday, the S&P 500 was up 0.3% to 3,983.17. The Dow Jones Industrial Average gained 0.6% to 34,189.97. The Nasdaq rose 0.6% to 11,001.10

Small company stocks outperformed the broader market. The Russell 2000 was up 1.7% to 1,876.06. Every major index is on course for weekly gains.

The report, which shows inflation slowing in December, raised hopes that the The Federal Reserve can go easier for the economy by using smaller rate hikes to cool prices. Such increases can stifle inflation, but they do so by slowing the economy and risk of recession. They also hurt investment prices.

Analysts warned investors not to get carried away. The economy is still being squeezed by high interest rates and there could be more big swings ahead.

Inflation has been declining for six months in a row. Even though it’s slowed to 6.5% last month from its peak of over 9% in June, that’s still high. The Fed has insisted it plans to raise rates further this year and expects no rate cuts before 2024 at the earliest.

Some areas of the economy remain strong and threaten to keep inflationary pressures on. First and foremost is the labor market. A report on Thursday showed fewer workers had applied for unemployment benefits over the past week. That’s an indication that layoffs remain low, despite some big tech companies making high-profile job cuts announcements.

A strong job market is obviously good for workers, especially when their pay rises have not kept pace with inflation. But the Fed claims that wage increases could prompt companies to raise prices to cover their higher costs and would only exacerbate inflation Wage increases for workers slowed In December.

Earnings season is set to start in earnest on Friday, with JPMorgan Chase and UnitedHealth Group making the headlines for the day. A major concern on Wall Street is that high inflation and a slowing global economy will erode profits for large companies.

Analysts say this could be the first time since 2020 that earnings per share for S&P 500 companies have fallen below year-on-year levels.

In other trading on Friday, US benchmark crude fell 18 cents to $78.21 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday it was up 98 cents to $78.39 a barrel.

Brent crude, the price basis for international trade, fell 31 cents to $83.72 a barrel.

The dollar fell to 129.16 Japanese yen from 129.24 yen. The euro slipped from $1.0849 to $1.0838.

Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed without permission. Asian markets are mostly higher, following Wall Street gains

Sarah Y. Kim

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