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A person on a bicycle pauses in front of an electronic stock board showing Japan's Nikkei 225 index at a securities firm Wednesday, May 15, 2024, in Tokyo. (AP Photo/Eugene Hoshiko)
business

Asian markets follow Wall Street higher ahead of key inflation update

11 Comments
By ZIMO ZHONG

Asian stocks were mostly higher on Wednesday after a rally on Wall Street that took the Nasdaq composite index to a record high.

A report Tuesday showed that prices remain stubbornly high at the wholesale level in the United States, before many price changes are passed along to consumers, with the producer price index reading for April reaching 0.5%, higher than forecast.

The rate of inflation has been ticking higher in 2024, raising concerns that the Federal Reserve could have a hard time taming inflation to its goal of 2%.

But investors were reassured by comments made by Fed Chair Jerome Powell. Speaking at a panel discussion in Amsterdam on Tuesday, he reaffirmed that the U.S. central bank won’t likely raise its key interest rate to respond to stubborn inflation. But he also said that his confidence that inflation will ease is “not as high as it was” because price increases have been persistently hot in the first three months of this year.

A bigger test for markets comes later Wednesday, when the U.S. will release its monthly update on consumer prices, or inflation faced by households. Economists expect the consumer price index to ease to 3.4% in April on a year-over-year basis.

In Asian trading, Tokyo’s Nikkei 225 index climbed 0.1% to 38,385.73 and Australia’s S&P/ASX 200 advanced 0.4% to 7,753.70.

In China, the Shanghai Composite index slipped 0.5% to 3,129.81 after the central bank kept a key lending rate unchanged Wednesday, signaling Beijing’s focus on maintaining monetary stability.

Elsewhere, Taiwan’s Taiex gained 0.8% and in Bangkok the SET lost 0.4%.

Markets in South Korea and Hong Kong were closed for a holiday.

On Tuesday, the S&P 500 index rose 0.5% to 5,246.68, and the Dow Jones Industrial Average rose 0.3% to 39,558.11.

The Nasdaq composite, which is heavily influenced by technology stocks, jumped 0.8% to 16,511.18. The tech sector has been a driving force for much of the broader market's gains this year.

Several “meme” stocks, including GameStop and AMC Entertainment, raced higher in a reprise of the social-media driven frenzy of three years ago. GameStop jumped 60.1% and AMC rose 32%. Both stocks gave back much of their gains from earlier in the day.

Bond yields edged lower. The yield on the 10-year Treasury slipped to 4.43% Wednesday from 4.49% late Monday.

Investors have been curtailing their expectations for the speed and frequency of interest rate cuts this year as inflation remains hotter than expected. Traders are betting on one or two rate cuts this year, according to data from CME Group.

Wall Street is still hoping the Fed can pull off its “soft landing,” where high interest rates work to cool inflation without slowing the economy into a recession. The economy remains strong, but consumers might be showing signs of fatigue under the weight of stubborn inflation. Economists expect a retail sales report on Wednesday to show that consumer spending softened in April, just as it has over the last several months.

In other trading, benchmark U.S. crude added 55 cents to $78.57 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 51 cents to $82.89 a barrel.

In currency trading, the U.S. dollar slipped to 156.37 Japanese yen from 156.42 yen. The euro cost $1.0826, up from $1.0820.

© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

©2024 GPlusMedia Inc.


11 Comments
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so inflation is getting under control in the US, these rest of the world is still struggling.

shows you how strong the US economy is.

2 ( +4 / -2 )

Inflation is here to stay. US economy is on its last legs

-4 ( +2 / -6 )

so inflation is getting under control in the US,

Do you know what inflation has been the last 3 1/2 years???

-2 ( +0 / -2 )

Inflation is here to stay. US economy is on its last legs

LOL record high markets is not its last legs

Do you know what inflation has been the last 3 1/2 years

been high worldwide, now under control, just before the election, maga got nothing to run on LOL

-1 ( +1 / -2 )

US national debt nearing 35 trillion.. Interest repayments alone will take up the largest share of fedral budget. Over 80% of all dollars every produced have been "printed" since 2020 or something crazy.

And stocks keep on going up? Tulips comes to mind.

Cash out while you still can.

0 ( +1 / -1 )

been high worldwide, now under control, just before the election, maga got nothing to run on LOL

Republicans have Biden's terrible record to run on.

https://lao.ca.gov/LAOEconTax/Article/Detail/766

-2 ( +0 / -2 )

Republicans have Biden's terrible record to run on.

Well they have the fake-news fake terrible record they've made up and repeat in their MAGA bubble.

But that might be enough for them. It's worked in the past.

2 ( +2 / -0 )

toraMay 15  09:16 pm JST

US national debt nearing 35 trillion.. Interest repayments alone will take up the largest share of fedral budget. Over 80% of all dollars every produced have been "printed" since 2020 or something crazy.

And stocks keep on going up? Tulips comes to mind.

Cash out while you still can.

Interest rates won't be 5% forever. New money can only be printed with something like Quantitative Easing which is being reversed.

-2 ( +0 / -2 )

Well they have the fake-news fake terrible record they've made up and repeat in their MAGA bubble.

Strangeland, you either don't understand or refuse to admit, that cost of living is 20% higher than when Biden entered office. The RATE of inflation has lowered but we are still experiencing high inflation compared to 4 years ago. There's nothing fake about it. Are you shopping at a supermarket that offers 2020 prices? Let us know where it is so we can all enjoy inflation-free living like you!

-1 ( +0 / -1 )

The RATE of inflation has lowered but we are still experiencing high inflation compared to 4 years ago.

4yrs ago, were were experiencing millions of lost jobs. massive unemployment benefits, 1000s dying everyday, because a moron downplayed a pandemic hoping to save his reelection

0 ( +0 / -0 )

4yrs ago, were were experiencing millions of lost jobs. massive unemployment benefits, 1000s dying everyday, because a moron downplayed a pandemic hoping to save his reelection

A moron? You mean the moron that was against causing millions to lose their jobs? The moron that fast tracked the vaccine? Please clarify.

0 ( +0 / -0 )

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