HONG KONG (AP) - Asia markets mostly advanced on Friday following a rebound on Wall Street. Additionally, Japan reported slowing inflation, which may lead to the maintenance of its ultralow interest rates.

Market Updates

  • U.S. futures (ES00) were mixed, while oil prices (CL00) fell.
  • Tokyo's Nikkei 225 index (NIY00) climbed 1.4% to reach 35,946.50.
  • Japan's inflation rate has slowed for the second consecutive month, potentially resulting in the Bank of Japan keeping its ultralow interest rates steady at its upcoming meeting next week.
  • The Hang Seng (HSI00) in Hong Kong decreased by 0.1% to reach 15,373.00, while the Shanghai Composite was down 0.5% at 2,832.29.
  • South Korea's Kospi increased by 1% to reach 2,464.76, and Australia's S&P/ASX 200 advanced 1% to reach 7,421.10. The SET in Bangkok was also up by 0.6%.

Wall Street Recovery

On Thursday, the S&P 500 rose by 0.9% to reach 4,780.94 after experiencing consecutive declines earlier in the week. The Dow Jones Industrial Average gained 0.5% to reach 37,468.61, and the Nasdaq Composite jumped 1.3% to reach 15,055.65.

Tech Sector Performance

Big Tech stocks played a significant role in the market recovery. Apple (AAPL) rose by 3.3%, turning its weekly loss into a gain.

Chip companies also performed well after Taiwan Semiconductor Manufacturing Co. (TW:2330) provided higher revenue forecasts for 2024 than expected by analysts. Broadcom (AVGO) gained 3.6%, while TSMC's stock (TSM) that trades in the United States jumped 9.8%.

Market Stability and Yields

This overall market recovery coincided with a stabilization of Treasury yields. Yields had been rising due to delayed expectations regarding the timing of interest rate cuts by the Federal Reserve. Higher yields can negatively impact stock prices and put pressure on the economy.

Fed Signals Potential Rate Cuts in 2024 as Inflation Cools

The Federal Reserve (Fed) has indicated its intention to potentially cut interest rates multiple times in 2024. This decision comes in response to a cooling inflation rate since its peak two summers ago. As a result, the Fed may adopt a more relaxed approach towards controlling the economy and the financial system.

10-Year Treasury Yield Rises to New High

On Friday, the yield of the 10-year Treasury bond (TY00) rose to 4.16%, up from 4.11% on Wednesday.

Mixed Reports on the Economy

Several reports on the state of the economy were released on Thursday, presenting a mixed picture. While one report indicated that manufacturing in the mid-Atlantic region was contracting more than anticipated, another report revealed that homebuilders had started more projects than expected, though still weaker compared to the previous month.

Financial Companies Struggle to Meet Analyst Expectations

Some financial companies experienced disappointing results for the final quarter of 2023, failing to meet analysts' predictions. Discover Financial Services (DFS) saw a decrease of 10.8% in its stock, while KeyCorp (KEY) lost 4.6%, as both reported profits well below Wall Street's forecasts, despite their revenues surpassing expectations.

Oil Prices Experience Slight Decline

In energy trading, benchmark U.S. crude oil saw a minor decrease of 9 cents, settling at $73.86 per barrel. Similarly, Brent crude (BRN00), the international standard, declined by 21 cents, reaching $78.89 per barrel.

Currency Exchange Rates Slightly Increase

The U.S. dollar (USDJPY) experienced a marginal increase of 0.1 against the Japanese yen, rising from 148.15 yen to 148.25 yen. Additionally, the euro (EURUSD) showed a slight appreciation, rising from $1.0874 to $1.0887.

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