Asia report: Most markets rise as inflationary pressures ease

Most markets in the Asia-Pacific region closed higher on Friday, as investors cheered data out of the US showing a continued cooling in inflationary pressures.

The US producer price index, released overnight, was down 0.5% month-on-month, suggesting price pressures for industry were easing.

“Asian equity markets traded modestly in the green to close out the week, seeking a fourth week of gains,” said TickMill market analyst Patrick Munnelly.

“The Nikkei 225 remained the standout performer, in the wake of Warren Buffett’s positive perspective on Japanese equities expressed on CNBC earlier this week.

“The Hang Seng Index and Shanghai Composite saw more modest gains, as investors were unwilling to significantly advance risk exposure ahead of next week’s pivotal economic data docket, which includes GDP numbers”

Munnelly noted that People’s Bank of China governor Yi Gang commented overnight that China's 2023 GDP growth should be maintained “around 5%”, aligning with the government's view.

“Yesterday’s US producer price inflation print was below expectations, coupled with weekly initial jobless claims data that suggests that the employment landscape is starting to shift, as corporate cost cutting predominantly in payrolls is starting to seep into official data.

“This led to improved risk appetite amongst US investors, with all benchmarks closing with gains in excess of 1%, and the rate sensitive Nasdaq notching up a 2.03% return on the day.”

Most markets rise on hopes of cooling global inflation

In Japan, the Nikkei 225 rose 1.2% to 28,493.47, while the Topix increased by 0.54% to 2,018.72.

Among the leaders on Tokyo’s benchmark were Itochu Corporation, which gained 4.52%, while Mitsui rose 3.23%.

Fast Retailing surged 8.49%, after the Uniqlo owner reported a 20.4% rise in revenue to JPY 1.47trn and a 4.5% improvement in net profit to JPY 153.3bn for the six months through February.

The company also raised its revenue estimates for the full financial year ending August to JPY 2.68trn, from JPY 2.65trn.

Elsewhere, Orix Corporation edged up 0.13% after the Nikkei reported that the Japanese government approved plans to open the country's first casino in Osaka.

The resort would be operated by Orix in a joint venture with MGM Resorts, and include a casino, conference centre and other facilities.

It was set to open in 2029, with Tokyo expected to approve up to three integrated resort locations, with a bid from the Nagasaki prefecture reportedly being considered.

In China, the Shanghai Composite climbed 0.6% to 3,338.15, while the Shenzhen Component increased by 0.51% to 11,800.09.

Shanghai’s top risers included Advanced Micro Fabrication, which soared 13.65%, while Anji Microelectronics Tech surged 11.31%.

Hong Kong's Hang Seng Index rose by 0.46% to 20,438.81, with SMIC gaining 7.17%, China Hongqiao increasing by 5.89%, and Geely Automobile rising 3.89%.

In South Korea, the Kospi rose by 0.38% to 2,571.49, with Posco Chemical surging 13.04% and KakaoBank rising 5.79%.

Australia's S&P/ASX 200 increased by 0.51% to 7,361.60, with Allkem climbing 5.44% and IGO rising 5.33%.

However, in New Zealand, the S&P/NZX 50 fell 0.42% to 11,880.56, with EBOS dropping by 2.51% and Restaurant Brands NZ declining by 2.21%.

In currency markets, the yen was last 0.08% stronger on the dollar to trade at JPY 132.47, while the Aussie was last 0.07% weaker at AUD 1.4756, and the Kiwi retreated 0.03% against the greenback to change hands at NZD 1.5888.

On the energy front, Brent crude futures were last up 0.38% on ICE at $86.42 per barrel, while the NYMEX quote for West Texas Intermediate increased 0.4% to $82.50.

Singapore stands pat on monetary policy as economic growth eases

In economic news, the Monetary Authority of Singapore (MAS) kept its monetary policy on hold in its latest decision on Friday.

The central bank said it believed the policy stance would continue to decrease imported inflation, and cool domestic cost pressures.

While it said it expected core inflation in the city-state to remain high in the coming months, it was looking at it to progressively ease in the second half of the year.

The Ministry of Trade and Industry meanwhile reported that Singapore's gross domestic product (GDP) grew 0.1% in the first quarter of 2023 - down from the prior period's growth of 2.1%, and below the 0.6% pencilled in by economists polled by Reuters.

On a quarterly basis, the economy contracted by 0.7%.

Reporting by Josh White for Sharecast.com.