Asian Markets Mixed as U.S. Stocks Near Records Amid Economic Data
Asian stocks showed mixed performance as U.S. markets approached record levels. Economic reports and central bank expectations influenced market sentiment, while oil prices saw modest gains.
Asian financial markets displayed varied performance on Friday, as investors processed recent economic data and anticipated upcoming releases. The region's stock indices moved in different directions, reflecting complex market dynamics and economic factors.
In Japan, the Nikkei 225, the country's primary stock market index, experienced a 0.9% decline in morning trading, settling at 36,491.80. This followed a substantial 3.4% increase the previous day. The Japanese yen strengthened against the U.S. dollar, with the exchange rate moving to 141.05 from 141.79, potentially impacting the nation's export-oriented businesses.
Market analyst Yeap Jun Rong from IG commented on the situation:
"The Bank of Japan is not expected to make any rate move at its meeting next week, but there may be some hawkish pricing brewing for policymakers to lay the groundwork for further rate hikes in December and beyond."
Investors were awaiting Japan's industrial production figures, set for release later in the day, which could provide insights into manufacturing demand and further influence the yen's value.
In contrast, Hong Kong's Hang Seng index rose 1.1% to 17,422.75, while mainland China's Shanghai Composite saw a slight 0.1% decrease to 2,714.77. Market participants were anticipating the release of China's monthly economic data, scheduled for the following day. Analysts predicted a potential slowdown in key indicators such as industrial production, fixed asset investment, and retail sales.
Other major Asian markets showed mixed results. Australia's S&P/ASX 200 gained 0.3% to 8,096.00, while South Korea's Kospi experienced a marginal 0.1% decline to 2,568.41.
In the United States, stocks moved closer to their record levels. The S&P 500 rose 0.7% to 5,595.76, approaching its July peak. The Dow Jones Industrial Average added 0.6%, reaching 41,096.77, while the tech-heavy Nasdaq Composite gained 1% to 17,569.68.
Technology company Nvidia continued its strong performance, rising 1.9% and contributing significantly to the S&P 500's gains. The chip manufacturer's stock has stabilized after a summer decline, during which it fell over 20% due to concerns about overvaluation in the artificial intelligence sector.
Recent economic reports in the U.S. have influenced market sentiment. The number of workers applying for unemployment benefits showed a slight increase, though remaining historically low. Additionally, wholesale prices in August were 1.7% higher than the previous year, indicating a slowdown in inflation from July.
These economic indicators have led traders to anticipate a traditional quarter-percentage point interest rate cut from the Federal Reserve in the coming week, rather than a larger half-point reduction some had expected.
In the bond market, the 10-year Treasury yield edged up slightly to 3.68%. This stabilization comes after a period of decline since April, reflecting expectations of future rate cuts. The easing of bond yields has contributed to a decrease in U.S. mortgage rates, with the average 30-year mortgage rate reaching its lowest level in 19 months, according to Freddie Mac.
Oil markets saw modest gains, with benchmark U.S. crude rising 31 cents to $68.28 per barrel, and Brent crude, the international standard, increasing by the same amount to $72.28 per barrel.
In currency markets, the euro slightly strengthened against the U.S. dollar, trading at $1.1086.
As global markets continue to navigate economic uncertainties and policy expectations, investors remain focused on upcoming data releases and central bank decisions for further direction.
