By ELAINE KURTENBACH, AP Business Writer
Parts of Asia bounced back on Friday from losses earlier in the week, dismissing data showing U.S. wholesale prices rose 11% in April from a year earlier.
The regional rally followed a mixed and silenced closure on Wall Street. Oil prices and futures in the US are also higher.
Investors are confused about what’s next for inflation and the US central bank’s response to it. Trading is volatile, with indices volatile as investors try to protect their portfolios from the impact of the highest inflation in decades.
Federal Reserve Chair Jerome Powell, who recently won Senate confirmation for a second four-year term, for the first time on Thursday acknowledged that high inflation and weakness in other economies could hold back his efforts to avoid a setback.
Powell sought to describe the Fed’s efforts to tighten interest rates in line with a so -called “soft landing” for the economy.
Hong Kong’s Hang Seng index gained 2.5% to 19,862.99 and Tokyo’s Nikkei 225 jumped 2.6% to 26,427.65. South Korea’s Kospi added 2.1% to 2,604.24 and in Sydney, the S & P/ASX 200 rose 1.9% to 7,075.10.
The Shanghai Composite index gained 0.9% to 3,081.89 and the Sensex of India rose 1.2%.
The central bank is working to fight against price increases by raising interest rates pulling some currencies lower as the dollar rises. The Japanese yen has weakened sharply over the past few months, while the Chinese yuan, whose value against other currencies is regulated, has also weakened.
The euro, too, weakened amid fighting in Ukraine and uncertainty over Russia’s gas and oil supplies. The euro traded at $ 1.0399 early Friday falling below the $ 1.0500 level it hovered near for most of the week.
“Europe’s risk sentiment has been damaged by news of Russia’s gas supply cuts in retaliation for sanctions,” Stephen Innes of SPI Asset Management said in a comment.
“The EUR (the euro) crashed to $ 1.05 and even broke at $ 1.04 behind the news. In fact, it really heightened uncertainty as we grew over the threat and disruption of Russia’s energy supply,” he said. .
The dollar is up 128.67 yen, up from 128.42. Against the Chinese yuan, it is at 6.79 per dollar, up from about 6.41 yuan a month ago.
On Thursday, the S&P 500 closed 0.1% lower, at 3,930.08, which fell 1.9% earlier in the day. The Dow Jones Industrial Average fell 0.3% to 31,730.30, while the Nasdaq rose 0.1% to 11,370.96.
The indices are on pace for sharp weekly declines, extending the market’s collapse into the current year. The benchmark S&P 500 is now down 17.5% this year, while the Nasdaq is down 27.3%.
The company’s small stocks held up much better than the rest of the market. Russell 2000 rose 1.2% to 1,739.38.
Another shocking inflation reading sparked a wave of selling early Thursday, with technology stocks weighed down the S&P 500 index the most.
The Labor Department’s report that wholesale prices rose 11% in April from a year earlier added to concerns that manufacturing costs were being passed on to consumers, which could push back spending. , which would stifle economic growth.
On Wednesday, the Labor Department’s report on consumer prices was hotter than expected on Wall Street, showing a larger -than -expected increase in outside food and fuel prices. That “core inflation” can be more predictive of future trends.
Inflation has exacerbated due to Russia’s invasion of Ukraine and the impact of the conflict on rising energy prices. China’s recent lockouts amid concerns about a revision of COVID-19 have also exacerbated supply chain and production problems at the center of rising inflation.
The impact of higher prices for consumers than global. On Thursday, Britain said its economy grew at its slowest pace in a year in the first quarter. That raises fears that the country could be heading for a recession.
In other trades, U.S. benchmark crude oil gained $ 1.16 to $ 107.29 per barrel in electronic trading on the New York Mercantile Exchange. It rose 42 cents to $ 106.13 per barrel on Thursday.
Brent crude, the pricing base of the international crude business, added $ 1.45 to $ 108.90 per barrel.
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