Asian Shares Rise As Inflation Fears Ebb

Asian stocks advanced on Friday as comments from Federal Reserve officials helped ease inflation fears.

Increases in prices above the Federal Reserve’s 2 percent goal should be temporary and the Fed would not raise rates until it sees inflation above target for a long time, said Federal Reserve Governor Christopher Waller on Thursday.

Fed policymakers Lael Brainard and Richard Clarida made similar comments on Tuesday and Wednesday, respectively.

Chinese shares rallied, led by financial and healthcare firms. The benchmark Shanghai Composite index jumped 60.84 points, or 1.77 percent, to 3,490.38 while Hong Kong’s Hang Seng index climbed 308.90 points, or 1.11 percent, to 28,027.57.

Japanese shares posted strong gains as positive corporate earnings outweighed lingering concerns over a slow vaccine rollout and news that the country will add three more prefectures to its state of emergency.

The Nikkei average surged 636.46 points, or 2.32 percent, to 28,084.47 but ended the week down 4.3 percent, marking its biggest loss since the week ended July 31, 2020. The broader Topix index closed 1.86 percent higher at 1,883.42.

Industrial equipment maker IHI Corp jumped 8.8 percent after announcing it expects to more than double this fiscal year’s operating profit. Citizen Watch soared 10.7 percent on reporting strong earnings. Tech stocks such as Advantest, Screen Holdings and Tokyo Electron surged 3-5 percent.

Australian markets advanced to snap a three-day losing streak, with banks and energy companies leading the surge.

The benchmark S&P/ASX 200 rose 31.50 points, or 0.45 percent, to 7,014.20 amid easing worries about inflation. The broader All Ordinaries index ended up 30.40 points, or 0.42 percent, at 7,239.40.

The big four banks rose between 0.6 percent and 1 percent while energy stocks such as Woodside Petroleum, Santos, Oil Search and Origin Energy climbed 1-3 percent.

Winemaker Treasury Wine Estates surged 6.1 percent, a day after it announced a market-beating full-year operating profit forecast.

Seoul stocks bounced pack as concerns eased about early post-pandemic inflation. The Kospi average rallied 31.21 points, or 1.00 percent, to 3,153.32, with tech and bio stocks outperforming.

Market bellwether Samsung Electronics rose over 2 percent. Samsung Biologics soared 9.5 percent on reports the drug maker has secured a deal to manufacture Moderna’s mRNA vaccine against the novel coronavirus.

Export prices in South Korea were up 10.6 percent year-on-year in April, the Bank of Korea said – after rising 5.9 percent in the previous month. Import prices spiked an annual 15.0 percent in April after climbing 9.0 percent a month earlier.

New Zealand shares finished modestly lower, with the benchmark NZX-50 index ending down 60.26 points, or 0.48 percent, at 12,367.86 after a 1 percent slide in the previous session. Warehouse Group shares jumped 3.2 percent after the retailer said it expects to double its full-year profit.

The manufacturing sector in New Zealand continued to expand in April, albeit at a slower pace, the latest survey from BusinessNZ revealed with a Performance of Manufacturing Index score of 58.4, down from 63.6 in March.

U.S. stocks rose sharply overnight to snap a three-session losing streak after data showed fewer Americans filed new claims for unemployment benefits last week and producer prices surged last month.

The Dow climbed 1.3 percent, the S&P 500 rallied 1.2 percent and the tech-heavy Nasdaq Composite added 0.7 percent after a Fed official said officials need to see several months of data before determining when to adjust policy.