AP

Asian stocks rise after Fed sees inflation improving

Jan 31, 2023, 10:52 PM | Updated: Feb 1, 2023, 9:56 pm

People wearing protective masks stand near an electronic stock board showing Japan's Nikkei 225 ind...

People wearing protective masks stand near an electronic stock board showing Japan's Nikkei 225 index at a securities firm Thursday, Feb. 2, 2023, in Tokyo. Asian stock markets gained Thursday after the Federal Reserve said the U.S. economy is moving toward lower inflation but more interest rate hikes are planned. (AP Photo/Eugene Hoshiko)

(AP Photo/Eugene Hoshiko)

BEIJING (AP) — Asian stock markets gained Thursday after the Federal Reserve said the U.S. economy is moving toward lower inflation but more interest rate hikes are planned.

Shanghai, Tokyo, Hong Kong and Sydney advanced. Oil prices rose.

Wall Street’s benchmark S&P 500 index closed 1% higher on Wednesday after the Fed raised its key lending rate by 0.25 percentage points, a smaller margin than previous increases. Chair Jerome Powell said the “disinflationary process has started” but “ongoing increases” in rates will be needed.

Traders hope lower inflation following repeated rate hikes by global central banks will encourage them to scale down plans for more increases. Some expect a U.S. cut before 2024, though Powell said he anticipates no reductions this year.

Markets put a “dovish interpretation” on Powell’s comments despite his warning that it was too early to declare victory, said Venkateswaran Lavanya of Mizuho Bank in a report.

The gap between market pricing and Fed plans “appears to have widened,” Lavanya wrote. “This leaves room for a rude shock down the road.”

The Shanghai Composite Index gained less than 0.1% to 3,287.29 and the Nikkei 225 in Tokyo added 0.2% to 27,391.85. The Hang Seng in Hong Kong advanced 0.3% to 22,128.78.

The Kospi in Seoul was 0.6% higher at 2,463.20 and Sydney’s S&P-ASX 200 rose 0.2% to 7,513.80.

New Zealand and Jakarta advanced while Singapore and Kuala Lumpur declined.

Following Powell’s news conference, the S&P recovered from an early loss to rise to 4,119.21, its highest close since August.

That appeared to encourage investors who worry the Fed and European central banks might be willing to push the global economy into recession to cool inflation that is near multi-decade highs.

“We can now say, I think for the first time, that the disinflationary process has started,” Powell said. He said his “base case” is that the Fed’s inflation target of 2% can be achieved “without a really significant downturn or really big increase in unemployment.”

The Dow Jones Industrial Average gained less than 0.1% to 34,092.96. The Nasdaq composite jumped 2% to 11,816.32.

Wednesday’s announcement raised the Fed’s overnight lending rate to a 16-year high of 4.5% to 4.75%, up from close to zero early last year.

Data on Wednesday gave a mixed picture of the U.S. job market, a factor in inflation expectations.

Hiring has stayed resilient despite repeated rate hikes. While that helps workers, it adds to worries that wage gains could add to upward pressure on prices.

Private payrolls rose by 106,000 in January, according to ADP, a payroll processor. That was a smaller gain than the previous month and below forecasts.

A separate U.S. government report indicated more strength. It said the number of job openings increased to 11 million in December, better than expected.

In energy markets, benchmark U.S. crude rose 66 cents to $77.07 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.46 on Wednesday to $76.41. Brent crude, the price basis for international oil trading, added 61 cents to $83.45 per barrel in London. It lost $2.62 the previous session to $82.84 a barrel.

The dollar fell to 128.55 yen from Wednesday’s 128.77 yen. The euro rose to $1.1018 from $1.0979.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

A Boeing 737 Max suffered damage to parts of the plane's structure after it went into a “Dutch ro...

Associated Press

Plane that did ‘Dutch roll’ on flight from Phoenix suffered structural damage, investigators say

A Boeing 737 Max suffered damage to parts of the plane's structure after it went into a “Dutch roll” during a flight from Phoenix last month.

4 hours ago

This photo provided by Randy Shannon shows Mooney Falls on the Havasupai reservation outside the vi...

Associated Press

Dozens report illness after trips to waterfalls near Grand Canyon

Dozens of hikers say they fell ill during trips to a popular Arizona tourist destination that features towering blue-green waterfalls deep in a gorge neighboring Grand Canyon National Park.

1 day ago

Mugshot of Rudy Giuliani, who was processed Monday, June 10, 2024, in the Arizona fake electors cas...

Associated Press

Rudy Giuliani posts $10K cash bond after being processed in Arizona fake electors case

Rudy Giuliani, a former New York City mayor and Donald Trump attorney, was processed Monday in the Arizona fake electors case.

4 days ago

FILE - White House former chief of staff Mark Meadows speaks with reporters at the White House, Wed...

Associated Press

Former Trump chief of staff Mark Meadows pleads not guilty in Arizona fake elector case

Former Donald Trump presidential chief of staff Mark Meadows and Trump 2020 Election Day operations director Michael Roman pleaded not guilty Friday in Phoenix to nine felony charges for their roles in an effort to overturn Trump's Arizona election loss to Joe Biden.

7 days ago

deadly heat wave last summer...

Associated Press

After a deadly heat wave last summer, metro Phoenix is changing tactics

Fresh memories of the deadly heat wave last summer have led Arizona authorities to launch new tactics ahead of summer 2024.

18 days ago

A Yuma man has been arrested for allegedly starting a wildfire in a national wildlife preserve near...

Associated Press

Man accused of starting wildfire in national wildlife preserve in Yuma

A Yuma man has been arrested for allegedly starting a wildfire in a national wildlife preserve near the California border.

18 days ago

Sponsored Articles

...

Collins Comfort Masters

Here’s how to be worry-free when your A/C goes out in the middle of summer

PHOENIX -- As Arizona approaches another hot summer, Phoenix residents are likely to spend more time indoors.

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

...

DESERT INSTITUTE FOR SPINE CARE

Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.

Asian stocks rise after Fed sees inflation improving