Asian shares were mostly higher on Friday, following a surge in U.S. stocks to record highs as investors anticipate easier interest rates in the near future. Japan’s Nikkei 225, Australia’s S&P/ASX 200, South Korea’s Kospi, and Hong Kong’s Hang Seng all saw gains in morning trading, while China’s Shanghai Composite slipped slightly.
The positive momentum in the Asian markets comes amidst relatively positive economic data from the region, particularly in China. However, investors remain cautious as the possibility of higher interest rates looms, especially in Japan once the economy picks up.
Federal Reserve Chair Jerome Powell’s recent testimony on Capitol Hill indicated that the central bank is close to delivering the interest rate cuts that Wall Street has been hoping for. Powell mentioned that the Fed is waiting for additional data to confirm a cooling inflation trend before making any decisions.
The anticipation of rate cuts has been driving optimism on Wall Street, with the S&P 500 setting its 16th all-time high this year and the Nasdaq composite nearing its record. Powell emphasized the importance of timing the rate cuts correctly to avoid causing undue harm to the economy.
In the bond market, Treasury yields eased after reports suggested a potential decrease in inflation pressure. Traders are also closely watching the European Central Bank for signs of interest rate cuts. The upcoming U.S. government report on the job market is expected to provide further insight into the health of the economy.
On Wall Street, tech giant Nvidia continued to drive the S&P 500 higher, reflecting the market’s enthusiasm for artificial intelligence technology. Energy trading saw benchmark U.S. crude and Brent crude prices rise, while the U.S. dollar slightly strengthened against the Japanese yen and the euro.
Overall, the global markets are closely monitoring central bank decisions and economic indicators for clues on future interest rate movements and their impact on investment opportunities.
