AP – Asian shares were mostly higher yesterday after the latest update on United States (US) inflation came in almost exactly as economists expected, and data on Japan’s economy showed relatively healthy growth.
Japan’s benchmark Nikkei 225 added 0.8 per cent to finish at 36,726.64. Australia’s S&P/ASX 200 rose 0.2 per cent to 7,865.50. Hong Kong’s Hang Seng declined 0.3 per cent to 17,054.92, while the Shanghai Composite surged 1.0 per cent to 2,877.73.
Trading was closed in South Korea for Liberation Day, a national holiday.
Japan’s Cabinet Office data showed the world’s fourth largest economy grew at an annual rate of 3.1 per cent in the April-June period, marking a rebound from the contraction in the previous quarter.
The annual rate shows how much the economy would have grown or contracted, if the quarterly rate had continued for a year. Domestic demand grew a robust 3.5 per cent from the previous quarter on the back of healthy household consumption and private sector investments, as well as government investments. Exports grew a booming 5.9 per cent.
A major element of uncertainty, which focused on currency fluctuations and interest rates lately, now turned to the political sector, as Japan’s ruling Liberal Democratic Party picks a new leader after Prime Minister Fumio Kishida said he wouldn’t seek reelection.
The next leader is likely to be from his party, signalling continuity in Japan’s basic pro-US, pro-business policies, but there is no clear successor. Some analysts think a younger candidate would have a better chance of getting more voter support.
The latest data for China made for a mixed picture, with retail sales for July showing an upside while property investment and manufacturing were less cheerful.
“The slowdown of investment and weak private sector and household confidence also present a strong case for stepping up fiscal stimulus. Many market participants would favour demand-side policy support,” said chief economist Greater China at ING Economics Lynn Song. On Wall Street, the S&P 500 rose 0.4 per cent to follow up on one of its best days of the year and climb within 3.7 per cent of its all-time high set last month. The Dow Jones Industrial Average gained 242 points, or 0.6 per cent, to finish a day above the 40,000 level for the first time in nearly two weeks. The Nasdaq composite edged up less than 0.1 per cent.
Treasury yields were also relatively steady in the bond market after the US government said consumers paid prices that were 2.9 per cent higher last month for gasoline, food, shelter and other things than a year earlier.
The data should keep the Federal Reserve on track to cut its main interest rate at its next meeting in September, after keeping rates at an economy-crunching level in hopes of stifling inflation.
The two-year Treasury yield edged up to 3.95 per cent from 3.94 per cent late on Tuesday.
All told, the S&P 500 rose 20.78 points to 5,455.21. The Dow gained 242.75 to 40,008.39, and the Nasdaq composite rose 4.99 to 17.192.60.
