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Asian stocks rose on Friday, tracking a rally on Wall Street after reports suggesting the economy and corporate earnings are doing better than fears.
In Tokyo, data showed that the core consumer price index rose 4.3%, slightly higher-than-expected and ahead of the Bank of Japan’s 2% target.
“This is to cast doubt on an eventual policy change by the central bank, although the government’s energy subsidies could be tapped next month to stall changes for the time being,” Yeap Jun Rong, market analyst at IG, said in a comment.
Japan’s benchmark Nikkei 225 rose almost 0.1% to 27,382.56. Australia’s S&P/ASX 200 rose 0.3% to 7,493.80. South Korea’s Kospi was up 0.6% to 2,484.02. Hong Kong’s Hang Seng rose 0.3% to 22,634.93.
Markets in Shanghai remained closed during the Lunar New Year holiday.
Stocks on Wall Street climbed to their highest level in nearly eight weeks after the Commerce Department reported that the US economy grew 2.9% year-on-year in the most recent quarter and is heading into 2022 despite higher interest rates and widespread fears ended with momentum ahead of an impending recession. That beat economists’ forecasts for growth of 2.3%.
The S&P 500 rose 1.1% to hit its highest level since Dec. 2 at 4,060.43. The Dow was up 0.6% to 33,949.41 and the Nasdaq Composite was up 1.8% to 11,512.41.
More swings could be yet to come as Wall Street digests a growing barrage of earnings and economic reports. Markets have been bobbing lately as worries of a deep recession and falling earnings battle hopes that the economy will pull off a soft landing and the Federal Reserve could ease interest rates.
Other reports Thursday showed that durable goods orders from factories rose more-than-expected in December and fewer-than-expected workers filed jobless claims last week.
Strong data suggests the economy can weather the blizzard of rate hikes by the Fed over the past year, plus at least one more expected next week, without sliding into a deep recession. Higher interest rates intentionally slow the economy by making it more expensive to borrow to buy a home, car, or anything else on credit. They also drag down the prices of stocks and other investments.
But a stronger-than-expected economy, particularly in the labor market, could push the Fed to keep rates higher for longer to ensure inflation is really crushed.
On the earnings front, reports from some big tech-focused companies helped build optimism a day after a flare-up of worries following forecasts from Microsoft that were widely seen as disheartening.
Tesla rose 11% after the electric-vehicle maker reported stronger earnings than analysts had expected for its most recent quarter. Seagate Technology rose 10.9% after reporting better-than-expected sales and earnings.
Steelmaker Nucor was also among the best-performing stocks in the S&P 500, rising 8.4% after beating Wall Street’s earnings and sales forecasts.
Chevron rose 4.9% after increasing its dividend and approving a program to buy back up to $75 billion of its shares. Both moves put cash straight into shareholders’ pockets, something Washington criticized. White House spokesman Abdullah Hasan suggested oil companies instead “use their record profits to increase supply.”
In energy trading, the reference price for U.S. crude oil rose 33 cents to $81.34 a barrel in electronic trading on the New York Mercantile Exchange. On Thursday, it lost 14 cents to $81.01.
Brent crude, the international price standard, was up 35 cents in London to $87.82 a barrel.
In forex trading, the US dollar fell from 130.23 yen to 130.18 Japanese yen. The euro cost $1.0873 compared to $1.0890.
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama
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