Japanese stocks outperformed other Asian markets on Friday, buoyed by a strong rally on Wall Street, which marked one of its most significant days this year. Positive economic data indicated that the U.S. economy is performing better than anticipated, largely supported by robust consumer spending.
U.S. futures showed an upward trend while oil prices experienced a decline.
In Tokyo, the Nikkei 225 concluded the week on a high note, soaring 3.6% to finish at 38,062.67. This upswing followed a significant selloff in the previous week, driven by the Bank of Japan’s interest rate hike, which prompted investors who had borrowed in yen and invested in dollar assets to liquidate their holdings.
The Japanese yen weakened against the U.S. dollar this week. The dollar dipped slightly to 149.00 yen during afternoon trading, a drop from 149.27 yen, having previously hovered around 146 yen.
In Hong Kong, the Hang Seng Index rose by 1.8% to 17,407.93, while the Shanghai Composite Index saw a marginal decline of 0.1%, ending at 2,874.95.
The governor of China’s central bank indicated plans for new policies aimed at bolstering economic growth in the latter half of the year. These strategies will focus on enhancing the central banking system and pivoting towards the financial technology sector. He also noted a significant reduction in the overall cost burden from local government debt.
Investors were particularly interested in e-commerce giants, with Alibaba Group reporting a 4% revenue increase in the second quarter. Despite falling short of estimates, its shares on the Hong Kong market jumped 4.7%. Similarly, JD.com’s shares surged 8.7% after announcing profits that exceeded forecasts.
In South Korea, the Kospi index climbed 2% to close at 2,697.23, while Australia’s S&P/ASX 200 gained 1.3%, finishing at 7,971.10.
On Thursday, the S&P 500 had a remarkable increase of 1.6%, marking its fourth-best day of the year and a string of six consecutive gains. This climb brought the index within 2.2% of its all-time high set last month, recovering from a near 10% dip.
The Dow Jones Industrial Average rose 1.4%, while the Nasdaq composite surged 2.3%, as major tech stocks, including Nvidia, began to regain ground lost over the past month.
Bond market yields also saw a rise following the encouraging economic report, which indicated that U.S. retail spending had increased significantly, surpassing economists’ expectations, while fewer workers filed for unemployment benefits.
Unlike previous years, positive economic reports are currently viewed as favorable by Wall Street, especially after a recent report revealed that hiring had decreased more than expected last month.
Overall, the S&P 500 gained 88.01 points to settle at 5,543.22. The Dow advanced 554.67 points to 40,563.06, and the Nasdaq composite rallied 401.89 points to reach 17,594.50.
In the bond market, the yield on the 10-year Treasury note climbed to 3.91% from 3.84%, while the two-year yield increased to 4.09% from 3.96%.
Traders widely anticipate that the Federal Reserve will cut its main interest rate at its next meeting, potentially marking the first reduction since the COVID-related downturn in 2020.
In energy markets, benchmark U.S. crude oil saw a decrease of 30 cents, trading at $77.86 a barrel, while Brent crude slipped 29 cents to $80.75 a barrel.
The euro was priced at $1.0983, an increase from $1.0971.
