TOKYO (AP) โ Asian stocks mostly fell on Friday despite upbeat news about the U.S. economy, and Japan's benchmark index fell after the latest data showed inflation has been slowing faster than the expected.
Tokyo's Nikkei 225 fell 1.3% to finish at 35,751.07 as a key measure of inflation slowed faster than expected in January, to 1.6% from 2.4% in December . The weaker price gains ease pressure on the Bank of Japan to tighten its ultra-loose monetary policy, which has pumped huge amounts of cash into markets. The central bank targets inflation of 2%.
โThe BOJ will wait to assess the underlying inflation trend over the coming months. We expect inflation to rebound above 2% in February,โ Robert Carnell, regional head of Asia-Pacific research at ING, said in a report.
Chinese markets ended a winning streak following a series of measures taken by the government to support stock prices and the real estate sector.
Hong Kong's Hang Seng fell 1.6% to 15,954.86, while the Shanghai Composite was little changed, up 0.1% at 2,910.22.
South Korea's Kospi rose 0.3% to 2,478.56. Markets were closed in Australia for a national holiday.
On Wall Street on Thursday, the S&P 500 added 0.4% to 4,894.16 and set a record for the fifth consecutive day. The Dow Jones Industrial Average rose 0.6% to 38,049.13 and the Nasdaq composite gained 0.2% to 15,510.50.
IBM helped lead the market with a 9.5% gain after reporting a better-than-expected profit for the latest quarter. Four out of five S&P 500 stocks rose in tandem, but Tesla kept market gains in check with a 12.1% drop.
The electric vehicle maker reported earnings and revenue that missed forecasts and warned of lower sales growth this year.
Wall Street's main attention was focused on a report indicating that the US economy continues to advance, demolishing last year's forecasts of an imminent recession due to high interest rates.
The economy grew at an annual rate of 3.3% in the last three months of 2023, according to an initial estimate from the US government. According to FactSet, that figure was much stronger than the 1.8% growth economists were expecting. Such a resilient economy should boost corporate profits, which are one of the main inputs that set stock prices.
The report also encouragingly confirmed that inflation continued to moderate into late 2023. Hopes are high that inflation will have cooled enough from its peak two summers ago for the Federal Reserve to begin cutting interest rates this year. That, in turn, would ease pressure on financial markets and boost investment prices.
"The headline data is the perfect combination of strong consumer spending and falling inflation," said Jamie Cox, managing partner at Harris Financial Group. "This is exactly what you want to see if you run the Federal Reserve and want to lower rates this year."
A separate report showed more American workers filed for unemployment benefits last week, but the number remains low relative to history and indicates a still resilient labor market.
Treasury yields fell in the bond market on expectations of rate cuts. The 10-year Treasury yield fell to 4.10% from 4.16% before the report was released and from 4.18% late Wednesday. In October, it was at 5%, its highest level since 2007.
Elsewhere on Wall Street, earnings season continued to accelerate, with more than two dozen S&P 500 companies reporting their latest results late Wednesday or early Thursday.
American Airlines rose 10.3% after reporting earnings for the latest quarter much stronger than analysts expected. On the losing side of Wall Street, Humana fell 11.7% after the insurer reported worse-than-expected end-2023 results.
In energy trading, benchmark U.S. crude oil fell 50 cents to $76.86 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell 54 cents to $81.42 a barrel.
In currency trading, the US dollar slowly rose to 147.85 Japanese yen from 147.64 yen. The euro cost $1.0817, down from $1.0848.
