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• Asia-Pacific markets climb as US economic data eases recession fears.
• Tokyo’s inflation rises to 2.6%, affecting Bank of Japan’s policy outlook.
• Dow Jones hits record high; Nasdaq declines due to Nvidia stock drop.

Asian markets showed positive momentum on Friday following reassuring economic data from the US and a batch of mixed economic indicators from Japan.

The initial jobless claims in the US and revised GDP growth figures helped alleviate concerns about a potential recession, boosting investor sentiment across the region.
 

US jobless claims fall slightly

The US Labour Department reported that initial jobless claims fell to 231,000 for the week, slightly above the Dow Jones estimate of 230,000 but down from the previous week’s 232,000.

Additionally, the second-quarter GDP growth was revised upward to 3% from the initial 2.8%, providing a positive signal about the robustness of the US economy.
 

Japan’s inflation hits 2.6%

In Japan, inflation in Tokyo surged to 2.6% in July, up from 2.2% in June and reaching its highest level since March. The core inflation rate, excluding fresh food prices, increased to 2.4%, exceeding the Reuters poll estimate of 2.2%.

These figures are considered indicative of broader national trends and may give the Bank of Japan additional leeway to tighten monetary policy.

Japan’s unemployment rate rose to 2.7%, surpassing the Reuters estimate of 2.5%. Retail sales, however, grew by 2.6% year-on-year, falling short of the 2.9% growth expected and down from June’s revised 3.8% increase.

Despite these mixed signals, Japan’s Nikkei 225 index rose by 0.46%, and the Topix climbed 0.59% following the release of the economic data.
 

South Korean and Australian indices see gains

In South Korea, the Kospi index increased by 0.7%, while the smaller-cap Kosdaq rose by 0.78%. South Korean retail sales declined by 1.9% month-on-month, and fell by 2.1% year-on-year.

Despite this, the broader market showed resilience. Australia’s S&P/ASX 200 index also saw a modest rise of 0.37%.
 

Hong Kong and mainland China markets make modest gains

In Hong Kong, the Hang Seng index opened 0.52% higher, and mainland China’s CSI 300 index rose by 0.13%. These gains reflect a generally positive regional sentiment following the improved US economic outlook.
 

US markets perform well

Overnight, the Dow Jones Industrial Average reached a new record, closing up 0.59% at 41,335.05. Gains in major companies like Goldman Sachs, Intel, and Visa contributed to this new high.

In contrast, the S&P 500 ended the session just below the flatline, while the Nasdaq Composite fell by 0.23%, driven down by a significant 6.4% drop in Nvidia’s shares.

The mixed economic indicators from Japan and the strong performance of the US markets created a generally positive trading environment in the Asia-Pacific region.

However, ongoing concerns about inflation and economic policy adjustments will likely continue to influence market dynamics in the near term.

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