Stock market today: Asian benchmarks mostly climb despite worries about US economy

TOKYO — Asian shares largely rose on Friday despite concerns about the economic outlook and inflation in the US and around the world.

The Bank of Japan ended a policy meeting without major changes, maintaining its benchmark interest rate within a range of 0 to 0.1%. In March, it raised the key rate from minus 0.1%, citing signals that inflation had reached the central bank’s target of around 2%.

Japan’s benchmark Nikkei 225 rose 0.8% to 37,934.76, while the US dollar rose to 156.22 Japanese yen from 155.58 yen.

While a weak yen is a boon for giant Japanese exporters like Toyota Motor Corp., whose foreign profits will get a boost from converting to yen, some Japanese officials, including Finance Minister Shunichi Suzuki, have expressed concern that an overly weak currency is not good. for the Japanese economy in the longer term.

In other currency trading, the euro was at $1.0740, up from $1.0733.

The Australian S&The P/ASX 200 fell 1.4% to 7,575.90. South Korea’s Kospi rose 1.1% to 2,656.33. Hong Kong’s Hang Seng rose 2.3% to 17,680.43, while the Shanghai Composite rose 1.1% to 3,087.60.

On Thursday, Wall Street traded lower on concerns about a potentially toxic cocktail that would combine stubbornly high inflation with a stagnant economy. A sharp decline in Facebook’s parent company, one of Wall Street’s most influential stocks, also hurt the market.

The S&P500 fell 0.5% to 5,048.42. The Dow Jones Industrial Average fell 1% to 38,085.80 and the Nasdaq index fell 0.6% to 15,611.76.

Meta Platforms, the company behind Facebook and Instagram, fell 10.6% even as it reported better earnings for its latest quarter than analysts expected. Investors focused instead on the big investments in artificial intelligence that Meta promised to make. AI has caused a stir on Wall Street, but Meta is increasing its expenses as it also provided a forecast range for its upcoming earnings, the midpoint of which was below analysts’ expectations.

Expectations were high for Meta, along with the other “Magnificent Seven” stocks that accounted for the bulk of stock market returns last year. They have to set a high bar to justify their high stock prices.

The entire US stock market felt the pressure of a new rise in government bond yields after a disappointing report that said US economic growth slowed to 1.6% in the first three months of this year from 3.4% at the end of 2023 on an annual basis.

That undermined the hope that the S&P500, record after record this year: that the economy can avoid a deep recession and support strong profits for companies, even if it takes time for high inflation to be fully controlled.

That’s what Wall Street calls a “soft landing” scenario, and lately expectations have been growing for a “no landing” in which the economy avoids a recession entirely.

Thursday’s economic data will likely be revised several times as the U.S. government refines the numbers. But the lower-than-expected growth and higher-than-expected inflation are “a bit of a slap in the face for those hoping for a ‘no landing’ scenario,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Treasury yields continued to rise as traders shed their bets on Federal Reserve rate cuts this year.

The yield on the 10-year Treasury rose to 4.70% from 4.66% just before the report and from 4.65% late Wednesday.

Traders are largely betting on the possibility of just one or perhaps two rate cuts this year by the Fed, if any, according to data from CME Group. They entered the year with a prediction of six or more. A series of reports this year showing inflation remaining higher than forecast has shattered those expectations.

In energy trading Friday, U.S. crude rose 37 cents to $83.94 a barrel. Brent crude, the international standard, rose 40 cents to $89.41 a barrel.

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AP Business Writer Stan Choe contributed.