Asian stocks are rising amid optimism on Wall Street about the bull run that ended this week, even as all eyes are on the Federal Reserve’s policy meeting scheduled for later this week.
TOKYO — Asian stocks rose on Monday amid optimism on Wall Street for a bull run that ended the week, even as all eyes were on the Federal Reserve’s policy meeting scheduled for later this week. .
Sydney’s S&P/ASX 200 rose 0.8% to 7,637.40 in afternoon trade. South Korea’s Kospi rose 1.1% to 2,685.37. Hong Kong’s Hang Seng Index rose 0.9% to 17,814.66, while the Shanghai Composite Index rose 0.8% to 3,113.28.
The Tokyo market was closed for trading due to the Showa Day holiday. A series of holidays known as Golden Week are approaching in Japan until Monday.
Stephen Innes, managing partner at SPI Asset Management, said the mood in the market had turned positive after last week’s tech-driven rally on Wall Street.
A recent series of strong financial results have boosted market sentiment, but a weaker yen could be a risk factor, he added.
“Investors will be closely monitoring the latest developments in the highly volatile depreciation of the Japanese yen against the US dollar and other major currencies,” Innes said.
The yen hit a new 34-year low after the Bank of Japan decided to keep interest rates unchanged on Friday. This was expected, but what was unexpected was that the central bank clearly had no serious concerns about the exchange rate, Innes added.
In currency trading on Monday, the US dollar briefly rose to the 160 yen level, but then fell sharply, raising speculation that the Bank of Japan would intervene in the market. The central bank did not comment on these developments. In afternoon trading, the dollar was at 156.84 yen. The euro rose to $1.0727 from $1.0699.
For Japan’s big exporters like Toyota Motor Corporation, a weaker yen could be a boon, boosting the value of overseas earnings when converted into yen.
However, a weaker currency can have a negative impact on the economy in the long run, as it reduces purchasing power and the potential for wage increases. Japan imports almost all of its energy.
Stocks ended a relatively strong week on Wall Street on Friday, with the S&P 500 rising 1% to end the winning week for the first time among the last four stocks.
The Dow Jones Industrial Average rose 153 points, or 0.4%, and the Nasdaq Composite Index rose 2%.
Recent data on US inflation has led analysts to expect the Federal Reserve to keep interest rates on hold. Key interest rates are at their highest levels since 2001. A report released on Friday showed that inflation remains high.
Fed officials have previously signaled there could be three rate cuts this year, after which the key interest rate will remain high for some time to ensure inflation is on track to its 2% target. states that it is possible.
U.S. Treasury yields fell sharply in the bond market on Friday following reports on inflation. The yield on the 10-year U.S. Treasury note fell to 4.66% from 4.71% late Thursday. Two-year Treasury yields, which are more closely tied to Fed expectations, stabilized. It decreased slightly from 5.00% to 4.99%.
Overall, the S&P 500 rose 51.54 points to 5,099.96. The Dow rose 153.86 points to 38,239.66 and the Nasdaq rose 316.14 points to 15,927.90.
In energy trading, benchmark U.S. crude oil fell 64 cents to $83.21 a barrel. Brent crude, the international standard crude, fell 79 cents to $88.71 per barrel.
