Asian shares rise as investors shrug off downbeat data

BANGKOK (AP) – Shares in Asia were up on Friday, despite slowing economies. Advance-tracked gains on Wall Street, where the market is headed for its first weekly gain after three-week penalty losses.

Tokyo’s Nikkei 225 index rose 1.2% to 26,491.97, and Seoul’s Kospi jumped 2.4% to 2,369.16. Hong Kong’s Hang Seng rose 2% to 21,707.92 and the Shanghai Composite Index rose 1% to 3,354.63.

In Australia, the S&P/ASX 200 rose 0.8% to 6,577.40. Shares also rose in India and Taiwan.

US and European futures were also higher.

Market players are waiting for US inflation data next week. They appeared to be backing off preliminary figures showing slowing factory activity in several countries, including Japan.

“Many developed economies’ construction manager surveys came in lower than expected in both the manufacturing and services sectors, pointing to a broad-based moderation in economic activity,” IG’s Jun Rong Yep said in a commentary.

A report on Friday showed inflation in Japan stood at 2.1% in May, driven by energy costs and a weak currency. However, underlying core inflation, which does not include volatile costs for energy and fresh foods, remains at 0.8% and central banks are unlikely to follow the example of the US Federal Reserve and other central banks in raising interest rates. , analysts said.

“The Bank of Japan does not believe this will be sustainable as wage growth remains soft and higher energy costs continue to impact corporate profits and consumer sentiment,” Marcel Thielient of Capital Economics said in a report.

On Wall Street, trading was staggering as investors focused on another round of testimony before Congress by Federal Reserve Chairman Jerome Powell. He told a House committee that the Fed expects to rein in inflation to the worst in four decades without knocking the economy into recession, but acknowledged that “that path has become more and more challenging.”

The S&P 500 closed up 1% at 3,795.73 after losing 0.4%. The Dow Jones Industrial Average rose 0.6% to 30,677.36 and the Nasdaq rose 1.6% to 11,232.19.

Shares of smaller companies also rose. The Russell 2000 rose 1.3% to 1,711.67.

Trading has been turbulent in recent weeks as investors try to determine whether a recession is coming. The benchmark S&P 500 is currently in a bearish market. That means it is down more than 20% from its most recent high, which was in January. The index has fallen for 10 of the past 11 weeks.

On Thursday, Powell insisted: “I don’t think a recession is inevitable.” He has said this is “definitely a possibility” and that the central bank faces a more challenging task amid the war in Ukraine, inevitably pushing up the prices of oil and other commodities even more and causing inflation. becoming more widespread.

Powell spoke to Congress a week after the Fed raised its benchmark interest rate by three quarters of a percent, its biggest hike in nearly three decades. Fed policymakers have also forecast a more accelerated pace of rate hikes this year, with the key rate reaching 3.8% by the end of 2023, compared to three months ago. This will be its highest level in 15 years.

The Labor Department reported Thursday that fewer Americans applied for jobless benefits last week, though it was slightly higher than economists expected. The solid job market is a relatively bright point in an otherwise weak economy, with consumer sentiment and retail sales showing increasing damage from inflation.

As pocketbooks grow at higher prices, consumers are shifting spending from big-ticket items like electronics to necessities. The pressure has been worsened by record-high gasoline prices that show no sign of easing.

Big technology and health care companies did the heavy lifting. Microsoft rose 2.3% and Johnson & Johnson 2.2%.

Energy stocks declined as US crude fell 1.8%. Valero fell 7.6%.

Early Friday, US benchmark crude was up 36 cents to $104.63 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the pricing base for international trade, fell 9 cents to $106.55 a barrel.

Bond yields have dropped significantly. The yield on the 10-year Treasury note, which helps determine mortgage rates, fell to 3.09% from 3.15% late Wednesday.

The US dollar fell from 134.94 yen to 134.73 Japanese yen. The euro rose from $1.0524 to $1.0539.

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