Asian stocks advanced on Friday, stimulated by favorable U.S. inflation and retail sales data that alleviated recession concerns in the world's largest economy. This optimism, however, led traders to temper their expectations for aggressive interest rate cuts by the Federal Reserve.
The dollar and U.S. Treasury yields remained largely stable during Asian trading hours, reflecting growing confidence that the U.S. economy may achieve a soft landing.
Gold prices saw a slight decline but were on course for a weekly gain, buoyed by hopes that the Federal Reserve would reduce interest rates by at least 25 basis points in September.
Similarly, oil prices dipped slightly but were set to achieve a weekly gain, driven by renewed optimism about the U.S. economic outlook and increased tensions in the Middle East.
China’s Shanghai Composite Index ended slightly higher at 2,879.43 after a volatile session. Meanwhile, Hong Kong's technology-dominant Hang Seng Index surged 1.88 percent to 17,430.16.
Japanese markets rallied as the yen lost some of its recent strength and growth concerns diminished. The Nikkei average leaped 3.64 percent to 38,062.67, marking its second-largest daily gain of the year and achieving its best weekly performance in over four years. The broader Topix Index climbed 2.99 percent to 2,678.60.
Fast Retailing, a major index player, soared 6.2 percent, and electrical component manufacturer Fujikura skyrocketed 11.4 percent. Technology stocks like Advantest and Tokyo Electron also saw gains in the range of 5-7 percent.
In Seoul, stocks posted robust gains, with the Kospi average rising 1.99 percent to 2,697.23, driven predominantly by technology stocks. Samsung Electronics increased by 3.9 percent, and SK Hynix escalated by 7 percent as U.S. economic slowdown fears eased. Automaker Hyundai Motor climbed 5.8 percent, while Kia Corp rose 3.5 percent.
Australian markets recorded their sixth consecutive session of gains, led by miners who thrived on U.S. economic optimism. BHP, Rio Tinto, and Fortescue Metals Group saw increases of 2-3 percent.
The benchmark S&P/ASX 200 ended 1.34 percent higher at 7,971.10, while the broader All Ordinaries Index climbed 1.31 percent to 8,189.90. Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index inched up 0.14 percent to 12,727.75.
In the U.S., stocks surged overnight, and the two-year Treasury yield saw its largest increase in four months, thanks to robust retail sales data and lower-than-anticipated weekly jobless claims, which helped alleviate recession fears. Strong earnings reports from retailer Walmart and tech giant Cisco further bolstered investor sentiment.
The tech-heavy Nasdaq Composite soared 2.3 percent, and the S&P 500 rallied 1.6 percent, marking their best six-day gain since November 2022. The Dow climbed 1.4 percent, ending higher for the fifth time in the past six trading sessions.
