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Kazuhiro Nogi/AFP/Getty Images
On the electronic bulletin board that displays the stock prices of companies listed on the Tokyo Stock Exchange, most stocks are rising. February 16, 2024.
Hong Kong/New Delhi
CNN
—
Japan’s stock market has overcome the gloomy economic situation Economic data rose on Friday, pushing up Asian stocks overall and ending the week on a positive note.
Japan’s benchmark Nikkei Stock Average closed above 38,000 points for the second day in a row, just shy of its historic high set in December 1989.
The stock market’s rally on Wall Street’s backlash came despite official data showing on Thursday that the country will slip into recession in 2023, losing its title as the world’s third-largest economy. .
“The nine-month rally in Japanese stocks has nothing to do with the economy, so yesterday’s (fourth quarter) economic contraction in US dollar terms due to weaker GDP and weaker yen has not deterred investors. ” said Neil Newman, a Tokyo-based Japan Macro strategist.
“Rather, the window of opportunity created by the weaker yen is emboldening overseas investors, as they fear the weaker yen will close soon,” he added.
The yen has fallen more than 6% against the dollar so far this year, after falling about 8% against the dollar in 2023. A weaker yen makes Japanese company stocks cheaper for foreign investors.
The UK also fell into recession in the final months of 2023, and US retail sales in January were much lower than expected. Analysts said the data could tip the scales in favor of central bankers cutting interest rates.
Stephen Innes, managing partner at SPI Asset Management, said: “The weaker economic indicators pave the way for relatively accommodative monetary policy, which will affect, if not the ultimate economic situation, particularly from an interest rate perspective. “This could provide a bullish backdrop for Asian markets.”
Following the rise in the New York market, other Asia-Pacific markets also rose.MSCI’s broadest index of Asian stocks ex-Japan ends More than 1% higher.
On Wall Street, U.S. stocks bounced back from steep losses earlier this week, with the S&P 500 index closing at a record high of 5,029.73 on Thursday. The blue-chip Dow Jones Industrial Average rose 0.9%, and the tech-heavy Nasdaq Composite Index ended 0.3% higher.
The US decline earlier this week came as a major inflation report revealed a robust rise in prices and worries that the US Federal Reserve will keep interest rates high for longer than expected. This happened in response to heightened interest among investors.
But once Fed officials allayed those concerns, the market rebounded. Chicago Fed President Austan Goolsby said Wednesday that a slight increase in inflation in the coming months is still consistent with inflation returning to the Fed’s 2% target.
“The resilience of the U.S. economy, characterized by its ability to weather global headwinds and maintain growth momentum, underscores the United States’ status as a major driver of global economic activity,” Innes said Friday. commented.
On Friday, Hong Kong’s Hang Seng index rose 2.5% and South Korea’s Kospi index rose 1.3%. Markets in mainland China remained closed for the Lunar New Year holiday. Trading will resume on February 19th.
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