HONG KONG (AP) — Asian shares have tracked Wall Street’s rally, led by a 2.4 per cent advance for Tokyo’s benchmark Nikkei 225 index powered by strong gains for semiconductor makers.
US futures rose while oil prices edged higher.
Japan’s benchmark Nikkei 225 gained more than 900 points to close at 38,460.08, its highest level in a month.
Shares in computer chip company Renesas Electronics Corp. jumped 10.5 per cent, while rival Tokyo Electronic surged 7.1 per cent.
Investors are watching to see how Japan’s central bank and its Finance Ministry react to prolonged weakness in the yen, which has been trading at its lowest level in 34 years, at a policy meeting that begins Thursday.
“Market participants will be closely monitoring updates for any indications of how the Bank of Japan might address foreign exchange pressures during this week’s policy meeting,” Anderson Alves of ActivTrades said in a commentary.
Shares in Greater China also rallied.
The Hang Seng in Hong Kong added two per cent to 17,158.55, while the Hang Seng Tech Index gained 3.1 per cent. Chinese artificial intelligence company Sensetime Group’s shares surged 31.2 per cent after it released the latest version of its SenseNova generative AI model on Tuesday.
But the Shanghai Composite index logged more meagre gains, rising 0.3 per cent to 3,031.83.
Taiwan’s Taiex gained 2.7 per cent.
In South Korea, the Kospi added 1.9 per cent to 2,673.78, led by a 3.4 per cent gain in heavyweight Samsung Electronics.
Australia’s S&P/ASX 200 index rose 0.1 per cent to 7,690.70 following the release of a fifth consecutive quarter of decelerating inflation, with the consumer price index in the first quarter easing to 3.6 per cent from previous 4.1 per cent.
On Tuesday, the S&P 500 climbed 1.2 per cent to 5,070.55, pulling further out of the hole created by a six-day losing streak. The Dow Jones Industrial Average rose 0.7 per cent to 38,503.69, and the Nasdaq composite jumped 1.6 per cent to 15,696.64.
A weaker-than-expected report on US business activity helped support the market, which remains in an awkward phase. The hope on Wall Street is for the economy to avoid a severe recession, but not to stay so hot that it keeps upward pressure on inflation.
A preliminary report from S&P Global released Tuesday seemed to hit that sweet spot. Treasury yields eased in the bond market, and stocks added to gains immediately after its release.
A flood of earnings reports also dictated much of trading, highlighted by a slew of companies that topped analysts’ expectations.
GE Aerospace flew 8.3 per cent higher after it raised its profit forecast for the full year, in addition to beating expectations for first-quarter earnings.
Kimberly-Clark gained 5.5 per cent after the maker of Huggies, Kleenex and Kotex also raised its earnings forecast for the full year. General Motors revved up by 4.4 per cent after citing sales of pickup trucks and other higher-profit vehicles. Danaher rose 7.2 per cent after pointing to strength in its bioprocessing and molecular diagnostics businesses.
They helped overshadow an 8.9 per cent drop for Nucor after the steelmaker fell short of forecasts for both profit and revenue.
With sceptics still calling the broad stock market too expensive, criticism would ease only if companies were to produce higher profits or if interest rates were to fall. The latter has been looking less likely.
Top officials at the Federal Reserve warned last week they may need to keep interest rates high for a while in order to ensure inflation is heading down to their two per cent target. That was a big letdown for financial markets, dousing hopes that had built after the Fed signalled earlier that three interest-rate cuts may come this year.
Lower rates had appeared to be on the horizon after inflation cooled sharply last year. But a string of reports this year showing inflation has remained hotter than expected has raised worries about stalled progress.
The yield on the 10-year Treasury fell to 4.59 per cent to relieve the pressure on stocks broadly, particularly high-growth ones and those that pay high dividends.
In oil trading, US benchmark crude added USD0.27 to USD83.63 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose USD0.11 to USD87.50 per barrel.
The US dollar rose to JPY154.90 from JPY154.82. The euro rose to USD1.0700 from USD1.0699.
