Source: AFP
Japanese shares rose and markets across Asia got off to a strong start on Friday, tracking big gains on Wall Street after encouraging US retail sales data reassured investors about the health of the world’s largest economy.
The benchmark Nikkei 225 index added nearly 3 percent after rallies on Wall Street, extending gains after shares fell in Tokyo on Monday on worries about the U.S. economy and a stronger yen.
Encouraging economic growth in Japan had already boosted the market on Thursday.
“The stabilization of market conditions means the BoJ could again consider further policy easing,” Alvin Tan of RBC Capital Markets said in a note.
“But the shock of the recent drop in Japanese stocks and the yen’s rise means another hike is likely not on the table at the BoJ meeting in September.”
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The dollar rose more than one percent against the yen after the release of the retail sales report.
A weaker-than-expected jobs report recently sparked market jitters on fears the world’s largest economy was in worse shape than expected — but continued spending will ease recession worries.
“This lackluster jobs data has everyone worried that the economy may crack under the pressure of high interest rates,” said independent analyst Stephen Innes.
“But Thursday’s numbers suggest the Fed might just pull off the impossible — a soft landing, slowing the economy enough to quell inflation without plunging us into recession.”
Chinese data on Thursday showed the country’s industrial output slowed and unemployment rose in July, while consumer spending narrowly beat analysts’ expectations.
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However, markets in Hong Kong and Shanghai were also higher on Friday.
The Hang Seng opened strongly, while the Shanghai Composite was marginally higher.
Despite a nearly 30 percent drop in quarterly earnings reported on Thursday, Chinese tech giant Alibaba saw its stock soar in Hong Kong after posting gains in New York.
Alibaba runs some of China’s most popular e-commerce apps, and its performance is widely seen as an indicator of broader economic trends.
Singapore, Seoul, Sydney, Taipei, Manila and Jakarta also posted healthy early gains.
Keys around 03:10 GMT
Tokyo – Nikkei 225: UP 2.9 percent at 37,800.42 (break)
Hong Kong – Hang Seng Index: UP 1.7 percent at 17,397.64
Shanghai – Composite: UP 0.1 percent to 2,880.05
EUR/USD: UP at $1.0980 from $1.0972
GBP/USD: UP at $1.2874 from $1.2853
Dollar/yen: DOWN to 148.82 yen from 149.06 yen
Euro/pound: DOWN to 85.29 pence from 85.36 pence
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North Sea Brent crude: DOWN 0.1% at $80.96 a barrel
West Texas Intermediate: DOWN 0.2 percent at $78.00 a barrel
New York – Dow: UP 1.4 percent at 40,563.06 (close)
London – FTSE 100: UP 0.8 per cent at 8,347.35 (close)
Source: AFP
