For free, real-time breaking news alerts sent straight to your inbox, sign up for our breaking news emails
Sign up for our free breaking news emails
Asian stocks were mostly lower on Friday following a mixed result on Wall Street, although Tokyo export-related shares were boosted by a stronger dollar.
Benchmarks rose in Tokyo, but fell in Sydney, Seoul, Hong Kong and Shanghai.
The yen weakened on speculation that the Bank of Japan may slowly change its lax policy as it assesses the impact of Monday's powerful earthquake in central Japan.
The US dollar rose to 145.23 Japanese yen from 144.63 yen. The euro fell from $1.0947 to $1.0930.
Japan's benchmark Nikkei 225 rose 0.3% to 33,377.42.
Hong Kong's Hang Seng lost 0.9% to 16,490.92, while the Shanghai Composite fell 1% to 2,926.32.
Australia's S&P/ASX 200 fell almost 0.1% to 7,489.10. South Korea's Kospi lost 0.4% to 2,578.08.
A weak yen is a boon for Japanese exporters like automakers because it increases the value of their overseas profits. Toyota Motor Corp. shares rose 2.5%, while Honda Motor Co. rose 2.2%.
“Sentiment is once again a bit wait-and-see as we may need to see a significant slowdown in the U.S. labor market to justify market pricing of a rate cut,” Yeap Jun Rong, market analyst at IG, said in a commentary.
Wall Street stocks finished mixed, carrying the weak start to 2024 into the third day.
The S&P 500 slipped 0.3% to 4,688.68, on track for its first losing week in 10 years. The Dow Jones Industrial Average rose less than 0.1% to 37,440.34 and the Nasdaq Composite fell 0.6% to 14,510.30.
Walgreens Boots Alliance sank 5.1% after cutting its dividend nearly in half to retain more cash. That helped overshadow gains by airlines and cruise ship operators, which recouped some of their steep losses earlier in the week. Carnival rose 3.1% and United Airlines rose 2.4%.
U.S. stocks fell broadly this week after rising to record highs by the end of last year. Critics said the market needed to at least take a breather after its big run, fueled by hopes that inflation had cooled enough for the Federal Reserve to cut interest rates significantly this year.
Interest rate cuts increase the prices of stocks and other assets while reducing pressure on the economy and financial system. Treasury yields in the bond market have already fallen since the fall amid expectations of such cuts, easing pressure on the stock market.
But Treasury yields rose on Thursday after reports showed the labor market could be stronger than expected. The economy is in a delicate phase where investors want a solid but not too hot period.
A healthy labor market is of course good for employees and allays fears of an impending recession. But too much strength could prompt the Federal Reserve to keep interest rates high because it could keep upward pressure on inflation. And the Fed has already raised its key interest rate to its highest level since 2001.
A U.S. government report on Thursday showed that fewer U.S. workers filed for unemployment benefits last week than expected. Another at the ADP Research Institute said private employers accelerated their hiring last month more than economists had expected.
A more comprehensive report on the labor market from the US Department of Labor will be released on Friday. Economists expect U.S. hiring fell to 160,000 last month from 199,000 in November.
Traders are betting that the Federal Reserve will cut interest rates twice as much this year as the central bank announced. Wall Street also expects the first cut could come as early as March, and a stronger-than-expected economy makes such predictions less realistic. Critics had already described her as overly aggressive.
In energy trading, the benchmark price of U.S. crude oil rose 45 cents to $72.64 a barrel. Brent crude, the international standard, rose 32 cents to $77.91 a barrel.
___
Yuri Kageyama is on X https://twitter.com/yurikageyama
Comments are closed.