Asian Stocks Mostly Up; Japan's Nikkei Declines Ahead of Election

HONG KONG -- On Friday, most Asian stock markets reported gains, contrasting with Japan's situation, where investors are focused on the upcoming election this Sunday.

Meanwhile, U.S. futures have decreased while oil prices have risen.

Recently appointed Japanese Prime Minister Shigeru Ishiba has called for a snap election aimed at boosting support for the ruling Liberal Democrats, who are currently facing a political funding scandal. This political turmoil has increased uncertainty in the markets and complicated efforts by the Bank of Japan to move away from their long-standing policy of near-zero interest rates.

In October, core inflation in Tokyo reached 1.8%, dipping below the central bank's 2% target for the first time in five months. This has heightened expectations that the Bank of Japan will maintain its key interest rate during the policy meeting scheduled for next week.

The Nikkei 225 index in Tokyo fell by 1% to 37,771.79 points, although the Japanese yen did show some strength against the U.S. dollar. This morning, the dollar was trading at 151.64 yen, down from 151.89 yen.

In contrast, Hong Kong's Hang Seng index increased by 1.1% to 20,720.60, while the Shanghai Composite index gained 0.8% to reach 3,307.14 points.

China's central bank has decided to keep its medium-term lending rate unchanged at 2%. Furthermore, it announced the issuance of 700 billion yuan (approximately $98.3 billion) in one-year medium-term lending facility loans to various financial institutions.

Other markets in Asia saw positive movements as well; South Korea's Kospi rose by 0.3% to 2,590.30, and Australia's S&P/ASX 200 increased by 0.1% to 8,216.50. Taiwan's Taiex also saw a 0.3% increase.

In the U.S., the S&P 500 index rose by 0.2% to 5,809.86, breaking a three-day losing streak for the first time since early September. The index fluctuated between gains and losses throughout the day, with an approximately even split between stocks rising and falling.

The Dow Jones Industrial Average, however, declined by 0.3% to 42,374.36, while the Nasdaq composite managed to increase by 0.8% to 18,415.49.

Tesla was the highlight on the market, experiencing a significant jump of 21.9% after surpassing analysts' expectations for quarterly profit. Tesla's CEO Elon Musk expressed optimism, projecting a sales growth of 20%-30% for the next year, even though revenue for the latest quarter did not meet analyst forecasts. This marked Tesla's best day in stock performance since 2013.

On the flip side, Boeing saw a decline of 1.2% as its machinists voted to continue their strike, thereby disrupting aircraft production. Over 60% of union members who voted rejected a proposed contract, prolonging the strike into its sixth week.

This week has seen a general retreat in the stock markets after both the S&P 500 and Dow set records last week. Rising Treasury yields in the bond market have made investors more cautious about paying high prices for stocks. Analysts had previously argued that stock prices had surged too quickly compared to the growth in corporate profits.

Additionally, a report released regarding unemployment claims presented a mixed view of the job market. It indicated a decrease in new unemployment benefit applications last week, which typically suggests lower layoffs. However, the report also showed an increase in the overall number of people collecting benefits, reaching its highest level in almost three years.

Following the release of the unemployment claims report, Treasury yields, which had previously declined, slightly rebounded. As of now, the yield on the 10-year Treasury note fell to 4.20% from 4.25%, still above the 4.08% level seen late last week.

In a separate preliminary report, it was noted that growth in business activity within the United States may have slightly accelerated last month. This arises as strength in the services sector compensates for weakness in manufacturing. Confidence has reportedly improved among companies, anticipating increased stability and certainty following the upcoming presidential election.

Moreover, another report indicated that new home sales were stronger than expected last month.

Looking at commodity prices, early Friday saw benchmark U.S. crude rise by 10 cents to $70.29 a barrel in electronic trading at the New York Mercantile Exchange. Internationally, Brent crude rose by 13 cents to $74.16 a barrel.

Meanwhile, the euro experienced a slight drop, falling to $1.0821 from $1.0828.

Asia, Stocks, Economy