Asian shares rose broadly on Tuesday as Wall Street edged closer to record highs after its roller-coaster of a summer.
In Tokyo, the Nikkei 225 stock index rose 2.1 percent to 38,156.41, restoring losses after a 1.8 percent drop the day before. The yen briefly approached 145 against the U.S. dollar on Monday before retreating to trade at 146.94 on Tuesday.
China kept its benchmark lending rate unchanged on Tuesday, with the one-year prime rate at 3.35% and the five-year LPR at 3.85%. This came after a series of major rate cuts implemented last month to support the economy.
The one-year LPR is the benchmark for most business loans, while the five-year LPR is a reference rate for mortgages.
Hong Kong’s Hang Seng fell 0.3% to 17,525.16, while the Shanghai Composite lost 1.0% to 2,865.18.
Australia’s S&The P/ASX 200 rose 0.2% to 7,996.50. Minutes of the Reserve Bank of Australia’s August meeting showed the board decided to leave the cash rate target unchanged at 4.35%. The board stressed that controlling inflation remained the top priority.
The RBA noted in the minutes that it was “unlikely that the cash rate target would be reduced in the near term, and it was not possible to approve or reject future changes to the cash rate target.”
South Korea’s Kospi rose 0.8% to 2,695.32.
US futures rose slightly, while oil prices fell.
Monday is the S&P 500 rose 1% for its eighth straight gain to close at 5,608.25, its longest winning streak since November and trailing the index best week of the year. It is back within 1% of its all-time high, after falling nearly 10% below that level earlier this month.
The Dow Jones Industrial Average rose 0.6% to 40,896.53 and the Nasdaq Composite rose 1.4% to 17,876.77.
Treasury yields remained relatively stable ahead of what is likely to be the biggest financial market event of the week: a speech on Friday by Federal Reserve Chairman Jerome Powell.
The setting for the speech in Jackson Hole, Wyoming, has been home to some major Fed policy announcements in the past. Expectations are not as high this time around, with nearly everyone expecting the Fed to cut interest rates next month.
That would be the first cut since the Fed began raising rates dramatically in early 2022, hoping to slow the economy enough to suppress inflation but not so much that it would trigger a recession. With inflation slowing from a peak of more than 9% two summers ago, Fed officials have already hinted that rate cuts are coming. The bigger question is whether the economy just needs the Fed to take its foot off the brakes or whether more acceleration and deeper cuts are needed.
A surprisingly weak report on hiring staff by American employers last month led the Fed to keep interest rates too high for too long. Such concerns combined with worries that Nvidia and others highly influential Big Tech stocks became too expensive amid the AI madnessalong with other factors, to send markets around the world through a frightening few weeks. That included the worst day for the Japanese market since the Black Monday Crash of 1987.
But subsequent assurances from the Bank of Japan on interest rates have helped calm the market. Several recent reports on the U.S. economy have also come in stronger than expected, covering everything from inflation Unpleasant sales at US retailerswhich reinforced the optimism.
On the bond market, the yield on the 10-year government bond fell from 3.88% on Friday evening to 3.87%.
In energy trading, U.S. benchmark crude lost 57 cents to $73.09 a barrel. Brent crude, the international standard, rose 61 cents to $77.05 a barrel.
The euro cost $1.1075, down from $1.1085.
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AP Business journalist Stan Choe contributed.
