By Gina Lee
Investing.com – Asia Pacific stocks were mostly up Friday morning, with investors shifting their focus to value from growth companies as signs of a strengthening U.S. labor market calmed inflation worries.
Japan’s Nikkei 225 jumped 1.22% by 9:54 PM ET (1:54 AM GMT).
South Korea’s KOSPI was up 0.51% and in Australia, the ASX 200 gained 0.64%.
Hong Kong’s Hang Seng Index edged up 0.18%.
China’s Shanghai Composite inched down 0.04% while the Shenzhen Component was up 0.31%, with the MSCI Inc. Index covering the country’s stocks entering bear territory.
U.S. shares ended higher fall during the previous session, thus ending a three-day fall. The Korean, Australian and Japanese indexes also posted their first gains in four sessions.
Tesla Inc. (NASDAQ:TSLA) shares fell as Chief Executive Officer Elon Musk’s tweet announcing the suspension of payments using bitcoin due to environmental concerns continued to have reverberations. Bitcoin was trading around the $50,000 mark during the Asian session, clawing back some gains after Musk’s tweet.
Investors seemed to be recovering from unexpectedly high U.S. inflation data, including the Core Consumer Price Index. U.S. producer prices released on Wednesday were also higher than expected. The Producer Price Index grew 0.6% month-on-month and 6.2% year-on-year in April.
Investors now await retail sales data, due later in the day.
However, initial jobless claims for the week fell to a 14-month low of 473,000, boosting investor sentiment.
Treasuries were also on the rise, with the benchmark 10-year yield easing to 1.66% even as an auction for 30-year bonds disappointed.
The U.S. Federal Reserve made some slight changes to its purchasing plan to focus more on longer-dated Treasuries but made no changes to the $80 billion monthly total.
“We see 10-year yields move up, we see inflation expectations move up, but as long as the underlying economic backdrop is still doing just fine it should power that value trade generally... we’re going to have some interesting days but the runway is there from an economic perspective for this rotation to keep going,” RBC Capital Markets head of equity strategy Lori Calvasina told Bloomberg.
On the commodities front, persistent concerns about a possible pullback in Fed support saw a recent rally hit the pause button. Oil fell to its lowest levels in over a month as concerns about runaway inflation raise the possibility of the Fed turning away from its current dovish policy.
However, a string of officials from the central bank reiterated that it will maintain its stance for the foreseeable future. Fed Governor Christopher Waller, the latest official to add his two cents, said the economic reopening is driving a temporary surge in price pressures which could last through 2022.