HONG KONG – Asian markets experienced a mixed day on Friday, following encouraging economic reports from the United States that brought stocks closer to record highs.
U.S. futures remained stable as oil prices saw an uptick.
In Japan, the Nikkei 225 index fell 0.9% in early trading, landing at 36,491.80, after a substantial 3.4% rise the previous day. The Japanese yen also gained strength against the U.S. dollar, with the USD/JPY dropping to 141.05 from 141.79, potentially impacting Japan’s export sector.
Market analysts predict that the Bank of Japan will hold steady on interest rates during its upcoming meeting, although there may be indications of potential rate hikes in December. Industrial production data from Japan, reflecting manufacturing demand, is expected later today and could further influence the yen’s valuation.
Hong Kong’s Hang Seng index increased by 1.1% to 17,422.75, while the Shanghai Composite index edged down 0.1% to 2,714.77. China is scheduled to unveil its monthly economic indicators on Saturday, with forecasts suggesting a slowdown in industrial production, fixed asset investment, and retail sales.
In Australia, the S&P/ASX 200 index rose 0.3% to 8,096.00, while South Korea’s Kospi dipped by 0.1% to 2,568.41.
In the U.S., the S&P 500 gained 0.7% to close at 5,595.76, bringing it within 1.3% of its July record, and is on track for its fourth winning week in the past five. The Dow Jones Industrial Average rose by 0.6% to 41,096.77, while the Nasdaq composite climbed 1% to 17,569.68.
Nvidia was a significant contributor to the S&P 500’s increase, rising 1.9% and highlighting a nearly 16% gain for the week. The tech company’s stock has recently stabilized after a decline of over 20% earlier during concerns of inflated valuations driven by artificial intelligence hype.
Recent reports also indicated a slight increase in U.S. unemployment benefit claims, although they remain historically low. Furthermore, wholesale prices rose by 1.7% in August compared to the previous year, indicating a slowdown from July’s inflation rate, with underlying metrics exceeding expectations.
These inflation figures mirror those reported earlier in the week regarding consumer prices, leading traders to anticipate a conventional interest rate cut of a quarter percentage point from the Federal Reserve next week, rather than a more aggressive half-point reduction.
While lower interest rates may stimulate economic growth and elevate investment prices, they can also exacerbate inflation concerns.
In the bond market, yields on the 10-year Treasury rose to 3.68% from 3.66% as they stabilize following a drop since April, spurred by expectations of rate cuts. This easing has contributed to a reduction in the average 30-year mortgage rate in the U.S., now at its lowest in 19 months.
In energy markets, benchmark U.S. crude gained 31 cents to reach $68.28 per barrel, while Brent crude, the international benchmark, also rose by 31 cents to $72.28 per barrel.
The euro increased slightly to $1.1086, climbing from $1.1074.
