Asia shares up as sentiments boosted by Fed minutes, US jobs

Asia shares up as sentiments boosted by Fed minutes, US jobs

TOKYO Asian shares are generally higher following a rally in Wall Street. Investors analyzed minutes from the Federal Reserve’s most recent meeting of policymakers, and welcomed encouraging data about U.S. job growth.

Beware of your fears ChinaRegional sentiment was affected by the economic slowdown.

Japan’s benchmark Nikkei225 rose 0.9% to 25,943.93 in morning trading. The S&P/ASX 200 in Australia climbed 0.1% to 7,068.60 South Korea’s Kospi grew 0.6% to 2,268.29. Hong Kong’s Hang Seng rose 2.3% to 21,274.44, while Shanghai Composite gained 0.6% at 3,143.63

Yeap Jun Rong, a market analyst with IG, stated in a report that “despite the positive close on Wall Street, the fade in earlier gains and muted movements in the U.S. Equity futures this morning are driving more measured upside at the Asia session.”

On Thursday, the government will release its weekly unemployment rate and its closely-watched monthly employment report for December. Inflationary pressures are supported by further Federal Reserve interest rate increases if there are strong jobs numbers.

The widespread COVID-19 cases in China have added to the gloom about China’s property sector slump and the effects of pandemic restrictions that were only recently relaxed as the virus became more widespread in the worst national outbreak yet.

Robert Carnell, ING’s regional head for research Asia-Pacific, stated that December retail sales should be lower than the previous month. He suggested that demand could rebound during the Lunar New Year later on in the month.

“After the long holiday there could be more daily COVID cases and then another quiet months for retail. Retailers may not have an easy road to recovery,” he stated.

Major indexes on Wall Street rallied after a government report that showed that job openings rose more than expected in November. Stocks lost some of their gains following the minutes of the Fed meeting last month, which highlighted how the central bank is determined to keep rates high to curb inflation.

The S&P 500 climbed 0.8% to 3,852.97 with more than 80% of shares seeing gains. The Dow Jones Industrial Average rose 0.4% at 33,269.77 and the Nasdaq composite climbed 0.7% to 10,458.76. The Russell 2000 index rose 1.2% to 1,772.54, a result of small company stocks outpacing the larger market.

A large share of the rally was attributed to banks, communications stocks, and companies that rely on consumer spending. Citigroup rose 2.6%, Starbucks gained 3.6%, and Netflix gained 4.9%.

The Fed raised its short-term key interest rate last month for the seventh consecutive time in 2022, signaling more increases to come. This was a sign that inflation, although still high, is slowing down.

Minutes from the mid-December meeting reveal that Fed officials were determined to keep rates high despite the fact that inflation has fallen from 9.1% in June to 7.1% November.

The Fed’s benchmark lending rates are now at 4.25% to 4.5%. This is an increase from close to zero after seven increases last year. It forecasts that the rate will range from 5% to 5.255% by 2023, and it isn’t calling for a rate reduction before 2024.

Technology sector layoffs are increasing as consumers face rising inflation and falling demand.

Many companies that have reduced staff due to lower demand were cheered by investors. Salesforce, a cloud computing software company, saw its stock rise 3.6% after it announced that it would be laying off 10% of its workforce. Vimeo, a video hosting platform, saw a 4% increase after it reportedly informed workers about job cuts.

Energy trading saw benchmark crude oil rise 85 cents to $73.79 a bar in electronic trading on New York Mercantile Exchange. It fell $4.09 on Wednesday. Brent crude, an international standard for pricing, rose 77c to $78.61 per barrel. U.S. crude oil settled 5.3% less on Wall Street.

The U.S. dollar dropped to 131.87 Japanese Yuen in currency trading from 132.56 Yoen. The euro cost $1.0620, slightly higher than $1.0610.

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This report was contributed by Alex Veiga and Damian J. Troise, AP Business Writers.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

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