BEIJING (AP) — Asian stock markets rose Friday after Wall Street fell closer to bear territory, China cut a key interest rate and Japanese inflation edged higher.

Market benchmarks in Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices fell more than $1 per barrel.

Wall Street’s benchmark S&P 500 index lost 0.6% on Thursday as rising interest rates, Russia’s war on Ukraine and a Chinese economic slowdown added to investor unease. The benchmark is down 18.7% from its January high and close to the 20% decline that defines a bear market.

“This is unlikely to be rock bottom, given the tightening of financial conditions ahead,” said Tan Boon Heng of Mizuho Bank in a report. “Reality may again be harsher than expectations.”

The Shanghai Composite Index rose 0.7% to 3,118.79 after the Chinese central bank reduced its rate on a five-year loan in a move that would shore up weak housing sales by cutting mortgage costs. The one-year loan rate that affects commercial borrowers was left unchanged.

That suggests Beijing is “trying to keep easing targeted and that we shouldn’t expect large-scale stimulus,” said Julian Evans-Pritchard of Capital Economics in a report.

The Nikkei 225 in Tokyo jumped 1.2% to 26,712.36 after the government reported inflation rose to 2.5% in April from the previous month’s 1.3%. It was the first time since 2008 that inflation has risen above the Japanese central bank’s 2% target.

Core inflation, which excludes fresh food and energy, rose to 2.1% from 1.5%, the highest level since 2015, allowing for tax hikes. But the central bank is unlikely to alter its low interest rate policies given the weakness of the economy, which contracted in the last quarter, economists said.

With “GDP yet to surpass its pre-virus level and wage growth still subdued, that won’t convince the Bank (of Japan) that tighter monetary policy is required,” Marcel Thieliant of Capital Economics said in a commentary.

The Hang Seng in Hong Kong gained 1.8% to 20,484.02 and the Kospi in Seoul advanced 1.5% to 2,633.92.

Sydney’s S&P-ASX 200 added 1% to 7,138.70. New Zealand and Southeast Asian markets also rose.

On Wall Street, the S&P 500 fell to 3,900.79. The Dow Jones Industrial Average fell 0.8% to 31,253.13. The Nasdaq slipped 0.3% to 11,388.50.

Investors are watching the Federal Reserve for hints of further interest rate hikes to cool inflation that is running at a four-decade high. Fed Chair Jerome Powell said this week the U.S. central bank might take more aggressive action if price pressures fail to ease.

Traders also are uneasy about China’s economy after official data showed factory and consumer activity in April were weaker than forecast after Shanghai and other industrial centers shut down to fight coronavirus outbreaks.

U.S. tech stocks fell Thursday, accounting for a big share of the S&P 500’s drop.

Cisco Systems slumped 13.7% after the seller of routers and switches cut its profit forecast amid supply chain constraints. Synopsis jumped 10.3% after the software company raised its financial forecasts for the year.

Retailers and other companies that rely on direct consumer spending mostly rose. Amazon added 0.2% and Expedia climbed 5.3%.

In energy markets, benchmark U.S. crude lost $1.22 to $108.67 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.62 on Thursday to $112.21. Brent crude, the price basis for international oil trading, shed 84 cents to $111.20 per barrel in London. It gained $2.93 the previous session to $112.04.

The dollar gained to 127.85 yen from Thursday’s 127.74 yen. The euro declined to $1.0565 from $1.0598.

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