Asian Shares Mostly Higher As Fed Worries Ease; Nikkei Bucks Trend

Asian stocks ended mostly higher on Friday, as data showing a slowdown in U.S. inflation helped calm worries over the Federal Reserve’s rate-hike trajectory.

Japanese shares bucked the uptrend as the yen hit a seven-month high and bond yields broke above the Bank of Japan’s target on speculation about a stimulus tweak heading into next week’s policy meeting.

Gold held steady near a seven-month high in Asian trading, while oil prices eased slightly after recent strong gains on optimism surrounding China’s reopening and signs of slowing inflation in the U.S. and Europe.

Chinese shares ended sharply higher after the release of data showing that the country’s trade surplus grew more than expected in December amid easing COVID-restrictions.

The benchmark Shanghai Composite Index rallied 1.0 percent to 3,195.31 as data showed exports and imports fell less than expected for the month.

Hong Kong’s Hang Seng Index jumped 1.0 percent to 21,738.66 after reports China is moving to take “golden shares” in units of Alibaba and Tencent. Shares of the companies ended higher by about 2 percent.

Japan’s Nikkei 225 Index tumbled 1.3 percent to 26,119.52, marking its first losing session in six, on speculation that the BOJ could tweak policy further at a policy meeting next week. The broader Topix ended 0.3 percent lower at 1,903.08.

A surging yen weighed on exporters, with automakers Honda and Toyota falling around 2 percent each.

Uniqlo owner Fast Retailing slumped nearly 8 percent after saying that first quarter earnings declined 2 percent, reflecting weakness at home and continuing COVID-19 restrictions in China.

Convenience store operator Seven & I Holdings jumped 6.1 percent after lifting its full-year earnings outlook.

Seoul stocks rose notably as the Bank of Korea hiked its key interest rate by 25 basis points, as widely expected.

The Kospi advanced 0.9 percent to 2,386.09, rising for the eighth straight session on expectations that the central bank might have reached the end of its hiking cycle.

Australian markets rose for a third straight session as higher commodity prices lifted mining and energy stocks. The benchmark S&P/ASX 200 Index gained 0.7 percent to close at 7,328.10, while the broader All Ordinaries Index settled 0.7 percent higher at 7,540.10.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index climbed 0.8 percent to 11,754.44.

Pacific Edge shares jumped almost 6 percent after the cancer diagnostic firm said it had received a signed agreement from Te Whatu Ora Southern for the use of its non-invasive Cxbladder genomic biomarker tests.

U.S. stocks closed higher overnight and Treasury yields ticked down, as fresh data showed consumer price inflation increased at a slower rate in December, matching expectations from economists.

U.S. consumer inflation edged down by 0.1 percent in December after inching up by 0.1 percent in November.

The annual rate of consumer price growth slowed to 6.5 percent from 7.1 percent in November, marking the smallest increase since October 2021.

The Dow rose 0.6 percent to reach its best closing level in over a month and the S&P 500 edged up 0.3 percent to extend gains for a third day, while the tech-heavy Nasdaq Composite added 0.6 percent to extend gains for a fifth consecutive day.

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