Asia report: Markets rise on back of buoyant US data

Asia-Pacific markets experienced widespread gains on Friday, bolstered by encouraging US economic data that eased recession fears.

Investors across the region responded positively to strong second-quarter GDP growth and lower-than-expected initial jobless claims stateside, alongside a series of economic reports from Japan.

“Asian markets are on a bit of a winning streak, closing in on a fourth consecutive month of gains, fueled by the ever-tempting hope of a soft landing in the US economy and the sweet prospect of lower interest rates,” said SPI Asset Management managing partner Stephen Innes.

“Meanwhile, the 10-year bond yield in Japan is inching up, thanks to Tokyo’s August data showing a little heat in price pressures. It’s almost like the Bank of Japan is warming up for another round of policy tightening.

“After a couple of wobbly days, the yen is getting its act together, while Treasuries seem poised for a fourth straight monthly victory lap.”

Markets rise across the region for another positive week

In Japan, the Nikkei 225 climbed 0.74% to 38,647.75, while the Topix gained 0.73% to close at 2,712.63.

Leading the gains were Furukawa Electric, up 4.71%, followed by Mercari, which rose 4.31%, and Murata Manufacturing, up 4.16%.

China's markets also saw significant gains, with the Shanghai Composite rising 0.68% to 2,842.21 and the Shenzhen Component surging 2.38% to 8,348.48.

Top performers in Shanghai included Guangxi Radio and Television Information Network, which soared 10.08%, Kunshan Kersen Science & Technology, up 10.05%, and Ningbo Water Meter Co, also up 10.05%.

In Hong Kong, the Hang Seng Index rose 1.14% to 17,989.07, driven by strong performances from China Resources Mixc Lifestyle, which jumped 8.82%, Li Auto, up 7.79%, and BYD, which gained 5.98%.

South Korea's Kospi added 0.45% to reach 2,674.31, with Seah Steel leading the market with a 7.27% increase, followed by Hanwha Ocean's 5.66% rise and Isu Specialty Chemical's 5.15% gain.

Australia's S&P/ASX 200 neared an all-time high, advancing 0.58% to 8,091.90.

Downer EDI led the rally with a remarkable 16.95% surge, while Spartan Resources gained 12.36% and Clarity Pharmaceuticals rose 8.4%.

In New Zealand, the S&P/NZX 50 increased by 0.76% to 12,447.68, supported by EROAD's 11.21% gain, Restaurant Brands New Zealand's 8.46% rise, and Fletcher Building's 6.97% increase.

In currency markets, the dollar was last up 0.07% on the yen to trade at JPY 145.09, while it experienced small declines against its antipodean counterparts.

It was last down 0.14% against the Aussie at AUD 1.4689, as it slipped 0.1% on the Kiwi to change hands at NZD 1.5964.

Oil prices also edged higher, with Brent crude futures last up 0.26% on ICE at $80.15 per barrel, and the NYMEX quote for West Texas Intermediate rising 0.32% to $76.15.

Buoyant US data contrasted by mixed regional picture

Economic indicators from Japan and South Korea presented a mixed picture on Friday, with rising inflation and unemployment in Japan contrasted by declining retail sales in South Korea.

In Tokyo, the inflation rate increased to 2.6% in August, up from 2.2% in July, marking its highest level since March.

The core inflation rate, which excludes fresh food prices, rose to 2.4%, surpassing the 2.2% anticipated by economists in a Reuters poll.

As Tokyo's inflation is often seen as a precursor to nationwide trends, the stronger figures may give the Bank of Japan more flexibility to consider tightening its monetary policy.

Japan's unemployment rate also edged higher, reaching 2.7% in July, above the 2.5% forecast by Reuters.

Meanwhile, retail sales growth slowed to 2.6% year-on-year in July, missing the expected 2.9% increase and down from the revised 3.8% growth recorded in June.

In South Korea, retail sales declined by 1.9% in July compared to June, and fell 2.1% year-on-year, indicating a slowdown in consumer spending.

Despite the mixed regional data, investor sentiment was buoyed by positive economic news from the US overnight.

Initial jobless claims slightly decreased to 231,000, while the second-quarter GDP growth was revised upward to 3%, exceeding the earlier estimate of 2.8%.

Reporting by Josh White for Sharecast.com.