Achi news desk-
TOKYO (AP) – Asian shares mostly rose on Friday despite worries about the economic outlook and inflation in the U.S. and the rest of the world.
The Bank of Japan ended a policy meeting without any major changes, keeping its benchmark interest rate in a range of 0 to 0.1%. In March, the key rate rose by minus 0.1%, indicating signs that inflation had reached the central bank’s target of around 2%.
Japan’s benchmark Nikkei 225 added 0.8% to 37,934.76, while the US dollar edged up to 156.22 Japanese yen from 155.58 yen.
While a weak yen is a boon for giant Japanese exporters such as Toyota Motor Corp., whose overseas earnings are boosted when converted to yen, some Japanese officials, including Finance Minister Shunichi Suzuki, have been expressing concern that too weak a currency is not good. for the Japanese economy in the long run.
In other currency trading, the euro cost $1.0740, up from $1.0733.
Australia’s S&P/ASX 200 fell 1.4% to 7,575.90. South Korea’s Kospi jumped 1.1% to 2,656.33. Hong Kong’s Hang Seng added 2.3% to 17,680.43, while the Shanghai Composite rose 1.1% to 3,087.60.
On Thursday, Wall Street was lower on concerns about a potentially toxic cocktail combining stubbornly high inflation with a flagging economy. A sharp drop in Facebook’s parent company, one of Wall Street’s most influential stocks, also hurt the market.
The S&P 500 fell 0.5% to 5,048.42. The Dow Jones Industrial Average fell 1% to 38,085.80 and the Nasdaq composite sank 0.6% to 15,611.76.
Meta Platforms, the company behind Facebook and Instagram, fell 10.6% despite reporting better profits for the latest quarter than analysts had expected. Instead, investors focused on the big investments in artificial intelligence that Meta promised to make. AI has created a frenzy on Wall Street, but Meta is ramping up its spending as it also gives a projected range for upcoming revenue whose midpoint is below analysts’ expectations.
Expectations had run high for Meta, along with the other “Magnificent Seven” stocks that drove most of the stock market’s gains last year. They need to hit a high bar to justify their high stock prices.
The entire US stock market felt the pressure of another rise in Treasury yields following a disappointing report that said growth in the US economy had slowed to an annual rate of 1.6% in the first three months of this year from 3.4% at the end of 2023.
That undermined a hope that has sent the S&P 500 to record after record this year: that the economy can avoid a deep recession and support strong corporate profits, even if high inflation takes time to get under control full
That’s what Wall Street calls a “soft landing” scenario, and expectations had recently risen for a “no landing” where the economy avoids recession entirely.
Thursday’s economic data is likely to be revised a couple of times as the US government refines the numbers. But the lower-than-expected growth and higher-than-expected inflation are “a bit of a slap in the face for those hoping for a ‘no landing’ scenario,” said Brian Jacobsen, chief economist at Annex Wealth Management.
Treasury yields continued to climb as traders matched bets on rate cuts this year by the Federal Reserve.
The yield on the 10-year Treasury rose to 4.70% from 4.66% just before the report and from 4.65% late on Wednesday.
Traders are betting largely on the possibility of just one or two interest rate cuts this year from the Fed, if at all, according to data from CME Group. They came into the year predicted six or more. A series of reports this year that show inflation remains hotter than predicted have crushed those expectations.
In energy trading on Friday, benchmark US crude edged up 37 cents to $83.94 a barrel. Brent crude, the international standard, gained 40 cents to $89.41 a barrel.
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AP Business Writer Stan Choe contributed.
Yuri Kageyama, The Associated Press
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