HONG KONG — Asian stock markets experienced mostly positive movements on Friday, with Japan being an exception as investors awaited the results of the upcoming election on Sunday.
In the U.S., futures showed a decline while oil prices experienced an uptick.
Japanese Prime Minister Shigeru Ishiba, having assumed office just weeks ago, is facing a political funding scandal and has called a snap general election to rally support for the ruling Liberal Democrats. This political turbulence has contributed to market uncertainty, complicating the Bank of Japan’s efforts to transition away from long-standing near-zero interest rates.
Recent government reports indicated that core inflation in Tokyo was at 1.8% in October, falling below the central bank’s target of 2% for the first time in five months. This development has heightened expectations that the central bank will maintain its key interest rate in the upcoming policy meeting.
The Tokyo market saw the Nikkei 225 index decline by 1%, closing at 37,771.79. Concurrently, the Japanese yen appreciated against the U.S. dollar, trading at 151.64 yen, down from 151.89 yen earlier in the day.
Conversely, Hong Kong’s Hang Seng index increased by 1.1% to 20,720.60, and the Shanghai Composite rose by 0.8% to 3,307.14. China’s central bank opted to keep the medium-term lending rate steady at 2% while also injecting 700 billion yuan into the market through one-year medium-term lending facility loans.
In other regional markets, South Korea’s Kospi climbed 0.3% to 2,590.30, and Australia’s S&P/ASX 200 rose by 0.1% to 8,216.50. Taiwan’s Taiex also showed improvement with a 0.3% gain.
On the U.S. front, the S&P 500 climbed 0.2% to 5,809.86 on Thursday, effectively ending a three-day losing streak. Despite fluctuations throughout the trading day, the gains were broadly shared among the stocks. The Dow Jones Industrial Average fell by 0.3% to 42,374.36, while the Nasdaq composite increased by 0.8% to 18,415.49.
Tesla stock surged 21.9% following a quarterly earnings report that exceeded analyst expectations. CEO Elon Musk expressed optimism for future sales growth between 20% and 30% for the upcoming year, although reported revenue fell short of projections. This marked the most significant single-day rise in Tesla stock since 2013.
Conversely, Boeing shares dipped by 1.2% as labor disputes persisted, with machinists voting to continue their strike, which has greatly impacted aircraft production.
This week has seen a broader retreat in stock prices after the S&P 500 and Dow reached record highs last week, primarily due to rising Treasury yields impacting stock valuations. Critics have highlighted increasing stock price valuations compared to corporate profit growth.
A recent unemployment claims report presented a mixed picture of the job market, showing a decrease in new applications for unemployment benefits, signaling fewer layoffs, but also a rise in the total number of beneficiaries to the highest level in nearly three years.
Treasury yields fluctuated in response to the unemployment claims data, with the yield on the 10-year Treasury dropping to 4.20%, having fallen from 4.25% earlier in the week, yet remaining higher than the previous week’s low of 4.08%.
A preliminary report hinted at a slight acceleration in U.S. business activity growth, revealing resilience in the services sector complemented by a recovery in business confidence ahead of the upcoming presidential election.
Additionally, new home sales were reported to have outpaced economists’ expectations last month.
In commodity markets on early Friday, benchmark U.S. crude increased by 10 cents to $70.29 per barrel, while Brent crude rose by 13 cents to $74.16 per barrel. The euro dipped slightly to $1.0821 from $1.0828.
