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TOKYO (AP) — Asian stocks were mostly higher Friday as U.S. stocks rose to record levels, with interest rate easing on the horizon.
Japan’s benchmark Nikkei Stock Average rose 0.7% in morning trading to 39,874.68. Sydney’s S&P/ASX 200 rose 0.9% to 7,829.60. South Korea’s Kospi rose 1.4% to 2,683.76. Hong Kong’s Hang Seng Index rose nearly 1.1% to 16,400.38, while the Shanghai Composite Index fell 0.1% to 3,023.74.
Economic indicators in regions such as China remained relatively positive, but investors remained cautious. For example, in Japan, interest rates are expected to rise if the economy recovers.
“This is due to reports that (Bank of Japan) officials are becoming more confident about wage growth as workers’ cash income has exceeded that of workers,” said Tan Boon Heng of Mizuho Bank in Singapore.
On Wall Street, the S&P 500 rose 1%, hitting its 16th all-time high so far this year. They erased their last losses on Monday and Tuesday and are on track for their 17th winning week out of the past 19 weeks, with an impressive performance.
The Dow Jones Industrial Average rose 130 points, or 0.3%, and the Nasdaq Composite Index rose 1.5%, finishing just shy of a record.
Chairman of the Federal Reserve Board Jerome Powell said: In testimony on Capitol Hill, he said it was “not long” before the central bank delivered the interest rate cuts that Wall Street desperately needed. He reiterated that the Fed is just waiting for more data to confirm that inflation is cooling.
This is an important point for Wall Street because lowering interest rates would relieve pressure on the economy and financial system, causing investment prices to fall. Traders initially shelved hopes for a March rate cut, but now see June as the most likely start date. The Fed’s key interest rate is at its highest level since 2001.
After coming under fire for taking too long to raise rates at a time when inflation is accelerating, Mr. Powell was questioned by the Senate Banking Committee about the possibility of cutting rates too slowly. That would cause undue pain because high interest rates slow the economy.
Associated Press business correspondent Seth Stell reports that momentum is building on Wall Street.
“Of course, we are fully aware of the risks,” Powell said.
He said the cuts would be implemented by the end of the year if conditions such as a strong job market and slowing inflation continue as expected. If interest rates are cut too soon, there is a risk that inflation will accelerate again.
In the bond market, U.S. Treasury yields fell on several reports suggesting that inflationary pressures may ease.
The yield on the 10-year U.S. Treasury note fell to 4.08% from 4.11% late Wednesday. It has generally fallen since it topped 5% last fall, spurring borrowing across the economy and potentially causing investors to pay higher prices for stocks. Two-year Treasury yields, which have moved more in line with Fed expectations, fell further.
Across the Atlantic, traders were also trying to guess when. european central bank The Fed plans to start lowering interest rates after the president said it was making progress toward curbing inflation.
One report says the number of U.S. workers is increasing slightly. applied for unemployment benefits Last week was better than expected, but the numbers are still low compared to the past.
A more impactful report could be released Friday morning, when the U.S. government releases its latest monthly update on the job market. Traders are hopeful that the job market remains healthy, but not enough to dissuade the Federal Reserve from cutting interest rates.
On Wall Street, Nvidia was again the strongest force pushing the S&P 500 up 4.5%. The stock has soared 87% this year after more than tripling last year amid Wall Street’s frenzy over artificial intelligence technology.
Overall, the S&P 500 rose 52.60 points to 5,157.36. The Dow Jones Industrial Average rose $130.30 to $38,791.35, and the Nasdaq Composite Index rose $241.83 to $16,273.38.
In energy trading, benchmark U.S. crude oil rose 37 cents to $79.30 a barrel. Brent crude, the international standard crude, rose 29 cents to $83.25 a barrel.
In currency trading, the dollar rose slightly from 147.90 yen to 147.97 yen. The euro was at $1.0953, little changed from $1.0951.
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