TOKYO – Stocks across Asia saw a rise on Thursday, with Japan’s Nikkei 225 climbing 1.6% to 40,676.77 as the country reported a significant increase in exports for the third consecutive month. Shipments of cars and electrical machinery helped reduce the trade deficit nearly in half compared to a year earlier. The positive news out of Japan contributed to the market’s overall positive sentiment.
Hong Kong’s benchmark also surged 1.8% to 16,836.46, while the Shanghai Composite saw a slight dip of 0.2% to 3,073.37 after the Chinese government announced new measures to support the economy. Sydney and South Korea also experienced gains, with the S&P/ASX 200 adding 0.5% and the Kospi jumping 1.5%.
In the U.S., Wall Street saw record highs as the S&P 500 closed at 5,224.62, marking a 0.9% increase. The Dow Jones Industrial Average also rose 1% to 39,512.13, and the Nasdaq composite climbed 1.3% higher to 16,369.41. The Federal Reserve’s indication of possible interest rate cuts later in the year provided a boost to investor confidence.
Market concerns about inflation have been growing, with recent reports showing inflation levels remaining higher than expected. Fed Chair Jerome Powell acknowledged these concerns but maintained that the overall outlook was for inflation to gradually move down toward 2%. The Fed is closely monitoring economic indicators to determine the timing of any potential rate cuts.
Looking ahead, traders are closely watching Treasury yields for clues on Fed action. The two-year Treasury yield briefly spiked before settling back down, indicating expectations for rate cuts in the near future. The bond market’s reaction to the Fed’s announcement suggests a cautious optimism among traders regarding the central bank’s monetary policy decisions.
Overall, market responses to the Fed’s latest statements reflect a delicate balance between supporting economic growth and managing inflationary pressures. With uncertainties lingering over the timing and extent of potential rate cuts, investors are closely monitoring developments in the global economy for insights into future market movements. Fed officials’ upgraded forecasts for U.S. economic growth this year provide a positive outlook, but ongoing concerns about inflation dynamics continue to shape market sentiment.