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Asian shares were mostly higher Thursday after the latest update on U.S. inflation came in almost exactly as economists expected, and data on Japan’s economy showed relatively healthy growth.
Japan’s benchmark Nikkei 225 jumped 1.0% in morning trading to 36,808.75. Australia’s S&P/ASX 200 rose 0.3% to 7,871.90. Hong Kong’s Hang Seng added 0.5% to 17,198.86, while the Shanghai Composite surged 1.0% to 2,879.03. 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% 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% 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%.
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 announced he won’t seek re-election.
Although the next prime minister is widely expected to be another Liberal Democrat, signaling continuity in Japan’s basic pro-U.S., pro-business policies, there is no clear successor waiting in line. Some analysts think a younger candidate will have a better chance wooing voter support, plummeting under Kishida.
On Wall Street, the S&P 500 rose 0.4% to follow up on one of its best days of the year and climb within 3.7% of its all-time high set last month. The Dow Jones Industrial Average gained 242 points, or 0.6%, 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%.
Treasury yields were also relatively steady in the bond market after the U.S. government said consumers paid prices that were 2.9% 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% from 3.94% late 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.
In energy trading, benchmark U.S. crude added 28 cents to $77.26 a barrel. Brent crude, the international standard, gained 26 cents to $80.02 a barrel.
In currency trading, the U.S. dollar rose to 147.46 Japanese yen from 147.22 yen. The euro cost $1.1011, inching down from $1.1016.
