Asian shares were mostly higher on Friday, following a surge in U.S. stocks to record highs. The prospect of easier interest rates in the near future has investors feeling optimistic.
In Japan, the benchmark Nikkei 225 rose by 0.7% in morning trading, reaching 39,874.68. Meanwhile, Sydney’s S&P/ASX 200 jumped by 0.9% to 7,829.60, and South Korea’s Kospi surged by 1.4% to 2,683.76. Hong Kong’s Hang Seng also saw gains, rising nearly 1.1% to 16,400.38, although the Shanghai Composite slipped by 0.1% to 3,023.74.
Despite positive economic data from the region, such as in China, investors are still exercising caution. There are concerns that higher interest rates could be on the horizon, particularly in Japan once the economy starts to pick up.
Federal Reserve Chair Jerome Powell recently indicated that the central bank is close to delivering the interest rate cuts that Wall Street has been hoping for. Powell stated that the Fed is waiting for additional data to confirm that inflation is cooling before making any moves.
The S&P 500 rallied by 1% to set its 16th all-time high this year, with the Dow Jones Industrial Average also making gains. The Nasdaq composite came close to reaching its record high, jumping by 1.5%.
In the bond market, Treasury yields eased after reports suggested that inflation pressures may be lessening. The yield on the 10-year Treasury dipped to 4.08%, while the two-year Treasury yield also fell.
Traders are now eagerly awaiting the U.S. government’s latest monthly update on the job market, which is expected to be released on Friday morning. The hope is that the job market remains healthy enough to support interest rate cuts by the Federal Reserve.
Overall, the positive sentiment in the markets has been driven by the prospect of easier interest rates and strong corporate earnings. Energy trading also saw gains, with benchmark U.S. crude rising to $79.30 a barrel.
In currency trading, the U.S. dollar inched up against the Japanese yen, while the euro remained relatively stable. The overall outlook for the markets remains positive, with investors keeping a close eye on developments in the global economy.
