Tokyo Shares Rise as Inflation Fears Ease Reducing Fed Rate Hike Odds
Tokyo shares surged at the start of a busy week for U.S. economic updates, while markets in Sydney and Hong Kong saw minimal movement. Investors are increasingly optimistic as concerns about inflation ease, lowering the likelihood of another interest rate hike by the Federal Reserve.
Japan’s Nikkei 225 jumped 2.3% in afternoon trading, reaching 69,901.70, marking its highest point in three months. Meanwhile, Australia’s S&P/ASX 200 edged up less than 0.1% to 8,686.40, and Hong Kong’s Hang Seng remained virtually unchanged at 23,976.15. Trading was closed in Shanghai and South Korea due to national holidays.
Shares related to artificial intelligence attracted significant interest. In Japan, Tokyo Electron climbed 5.2%, and SoftBank Group’s shares rose 3.1%. Taiwan Semiconductor Manufacturing Co. (TSMC) also saw a 3% increase.
Last week, U.S. stocks neared all-time highs after the latest job market report eased inflation worries. The S&P 500 rose 0.7%, the Dow Jones Industrial Average added 0.5%, and the Nasdaq composite gained 1.2%. The report showed fewer job additions than expected, reducing the chances of a Federal Reserve rate hike.
The pullback in expectations for an October rate hike helped stabilize the bond market, with the 10-year Treasury yield briefly dropping below 5.17% before bouncing back to 5.28%. In energy trading, U.S. crude fell 1.55% to $89.70 a barrel, and Brent crude declined 0.99% to $101.24.
In currency trading, the U.S. dollar slipped to 157.76 Japanese yen, and the euro fell to $1.1189.