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Asia shares mixed after Wall Street hits new records


Nikkei 225 added 0.4% to 38,868.94, S&P/ASX 200 dropped 0.3% to 7,724.80, Kospi rose 0.3% to 2,763.24, Hang Seng slid 0.6% to 18,004.71, while the Shanghai Composite dropped 0.1% to 3,025.39

Asian shares were mixed Friday after Wall Street’s continued frenzy around AI technology pushed indexes on Wall Street to more records.

Japan’s benchmark Nikkei 225 added 0.4% to 38,868.94 after the BOJ kept its monetary policy intact, though it did say it intends to begin reducing its government bond purchases as it comes out of its ultra easy policy.

Even if the BOJ wants to convey that the direction of travel is for tightening, the key guiding principle is gradualism, Tan Jing Yi at Mizuho Bank said in a commentary. Fact is, underlying economic confidence is at best fragile if not fraught.

Australia’s S&P/ASX 200 dropped 0.3% to 7,724.80. South Korea’s Kospi rose 0.3% to 2,763.24. Hong Kong’s Hang Seng slid 0.6% to 18,004.71, while the Shanghai Composite dropped 0.1% to 3,025.39.

On Thursday, the S&P 500 gained 0.2% to its all-time high set the day before, ending at 5,433.74, even though the majority of its stocks dropped. The Nasdaq composite jumped 0.3% from its own record, closing at 17,667.56, amid gains in technology stocks.

The DJIA declined 0.2% to 38,647.10.

Treasury yields eased again in the bond market as traders grew convinced that inflation is slowing enough to get the Fed to cut interest rates later this year.

The latest update on inflation showed prices paid at the wholesale level were not as bad as economists anticipated. They actually declined from April into May, when economists were forecasting an increase.

That followed a surprising update from Wednesday that showed inflation at the consumer level was lower than expected. Fed Chair Jerome Powell called that report encouraging and said policymakers need more such data before reducing their main interest rate from the highest level in two decades.

It is a question of when they cut, not if, said Niladri “Neel” Mukherjee, chief investment officer of TIAA Wealth Management.

High interest rates have been dragging on some parts of the economy, especially manufacturing. A separate report on Thursday showed more U.S. workers filed for unemployment benefits last week than economists expected, though the number is still relative low.

The hope on Wall Street is that growth for the job market and economy continues to slow in order to take pressure off inflation, but not so much that it creates a deep recession.

Companies whose profits are most closely tied to the strength of the economy lagged the market Thursday after the reports, such as oil and gas producers and industrial companies.

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