Asian shares mostly rose Thursday as investors turned their attention to the upcoming decision of the Bank of Japan on monetary policy. The Bank of Japan is not expected to raise its benchmark rate at the end of its meeting on Friday, given the pressure on the economy caused by the dollar’s surge against the Japanese yen.
Following the Federal Reserve’s decision to keep interest rates steady after its latest policy meeting, Treasury yields dropped as a report revealed a slower-than-expected rise in inflation. This news eased concerns about rising prices and opened the possibility for the Federal Reserve to lower interest rates in the future.
In Japan, the benchmark Nikkei 225 dipped slightly, while Australia’s S&P/ASX 200 and South Korea’s Kospi saw gains. Hong Kong’s Hang Seng also increased, but the Shanghai Composite declined.
On Wall Street, the S&P 500 and the Nasdaq composite hit record highs, while the Dow Jones Industrial Average lagged. Smaller companies in the Russell 2000 index led the market higher.
The decrease in inflation led to a rally in various assets from bitcoin to gold to copper, with expectations of future interest rate cuts. This positive data also prompted optimism among investors in U.S. stocks, highlighting the importance of sustainable inflation growth.
The Federal Reserve Chair, Jerome Powell, noted that more positive data is needed to support the decision to lower interest rates gradually. Lower rates could benefit households and boost investment prices, with the housing market expected to receive a much-needed energy boost.
Overall, despite concerns about high interest rates and economic slowdown, the surge in AI-related investments has significantly impacted the market. Companies like Oracle and Nvidia have shown robust performance, riding the wave of AI technology.
In energy trading, benchmark U.S. crude and Brent crude prices experienced slight declines on Thursday, adding to the market’s mixed performance amidst shifting economic indicators globally.
