TOKYO — Asian shares were mostly higher on Thursday, while Chinese shares extended gains after Beijing announced a series of policy measures to support sagging markets.
Hong Kong rose 1.8% and Shanghai rose 3%. In Tokyo and Seoul, benchmarks slowly rose. US futures and oil prices rose.
Late on Wednesday, the Chinese central bank announced a set of rules for lending to project developers. It previously said it would cut banks’ reserve requirements to pump about 1 trillion yuan ($141 billion) into the economy.
China’s economy has slowed, with growth expected to be less than 5% this year, the lowest level since 1990, excluding the years of the COVID-19 pandemic. A debt crisis in the real estate sector has exacerbated other longer-term problems.
Shares in Chinese property developers rose on Thursday, with China Evergrande Holdings rising 5.4% and Country Garden gaining 5.9%.
Hong Kong’s Hang Seng rose 2.0% to 16,219.04, while the Shanghai Composite index rose 2.9% to 2,902.85.
Tokyo’s Nikkei 225 was little changed in afternoon trading, rising about 10 points to 36,236.47.
Speculation is mounting that the Bank of Japan will end its negative interest rate policy later this year, and investors are bracing for what that could mean for the country’s inflation, as well as its currency.
South Korea’s Kospi rose less than 1 point to 2,470.34 after the country’s central bank said the economy grew at a better-than-expected quarterly growth rate of 0.6% in the final quarter of 2023.
Sydney’s S&The P/ASX 200 rose 0.5% to 7,555.40.
On Wednesday the S&The P500 added 0.1% to 4,868.55, a record for the fourth straight day. Gains for technology stocks pushed the Nasdaq composite up 0.4% to 15,481.92. The Dow Jones Industrial Average fell 0.3% to 37,806.39.
Stock prices have been roughly rising to records lately on hopes that cooling inflation will convince the Federal Reserve to cut rates several times this year. Government bond yields have already fallen significantly due to such expectations, which could ease pressure on the economy and the financial system.
The latest signal of economic strength came Wednesday morning, when a preliminary report showed business output growth accelerated to the highest level in seven months. Perhaps even more important to Fed officials is S.’s flash report&P Global also said prices charged by companies rose at the slowest rate since May 2020.
Later on Thursday, the government is expected to report that the U.S. economy grew at an annual rate of about 2% in October-December, a slowdown from strong annual growth of 4.9% in the previous quarter.
It continues to testify to the surprising sustainability of the world’s largest economy, which marks its sixth consecutive quarter of growth at an annual rate of 2% or more. Steady spending by consumers, whose purchases drive more than two-thirds of the economy, has helped fuel this growth.
Treasury yields in the bond market erased earlier losses after the report. The yield on the 10-year government bond rose to 4.17% from 4.14% late Tuesday. Two-year Treasury yields, which depend more on Fed expectations, remained at 4.38% after falling to 4.26% shortly before the report.
Economic reports due later this week could further influence expectations for rate cuts this year. On Thursday, the government will provide its first estimate of how fast the economy will have grown by the end of 2023. A day later, she will provide the final monthly update on the Federal Reserve’s preferred inflation measure.
In energy trading, U.S. benchmark crude added 32 cents to $75.41 a barrel. Brent crude, the international standard, rose 28 cents to $80.32 a barrel.
In currency trading, the US dollar rose from 147.51 yen to 147.65 Japanese yen. The euro cost $1.0891, up from $1.0884.