TOKYO – Asian shares were mostly higher Thursday after an advance on Wall Street that ended a three-day losing streak.
Tokyo, Hong Kong and Shanghai advanced while Seoul edged lower. Oil prices fell back and U.S. futures climbed.
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Investors appeared to brush aside fresh evidence that inflation remains widespread in the U.S. economy according to a U.S. government report that rising energy costs pushed wholesale prices up a record 11.2% last month from a year earlier.
That report followed news a day earlier that U.S. consumer prices remain at their highest levels in generations.
Rising prices are driving the Federal Reserve and many other central banks to tighten monetary policy by raising interest rates, among other measures, to help cool the surging demand that is contributing to the problem.
South Korea's central bank raised its benchmark interest rate by 25 percentage points to 1.50%. That was its fourth increase since August 2021. The Kospi in Seoul slipped less than 0.1% to 2,715.27.
Shares in Singapore were flat after the Singapore Monetary Authority tightened its policy by adjusting currency exchange rates in a more aggressive move than had been expected. It also raised its forecast for 2022 inflation to 2.5%-3.5% from 2.0%-3.0%.
New Zealand's central bank raised its benchmark interest rate on Wednesday.
Tokyo's Nikkei 225 index gained 1.2% to 27,167.69 and the S&P/ASX 200 in Sydney climbed 1.6% to 3,238.51.
Hong Kong's Hang Seng rose 0.8% to 21,549.12 and the Shanghai Composite index advanced 0.7% to 3,207.85 after the government indicated China's central bank may ease policy to counter the blow to its slowing economy from pandemic-related shutdowns in major cities like Shanghai and Guangzhou.
U.S. stock and bond markets face a shortened week and will be closed on Friday for the Good Friday holiday.
On Wednesday, the S&P 500 index rose 1.1% to 4,446.59, breaking a 3-day losing streak brought on by persistent worries about inflation and the tough medicine the Federal Reserve is planning to use against it.
The Dow Jones Industrial Average rose 1% to 34,564.59 and the Nasdaq picked up 2% to 13,643.59. The Russell 2000 index surged 1.9% to 2,025.10 and is on track for a weekly gain.
Travel-related companies were among the biggest gainers. Delta gained 6.2% after it reported strong revenue during its first quarter and solid bookings. Technology stocks also gained, while banks slipped following a disappointing earnings report from JPMorgan. It fell 3.2% after revealing a sharp drop in profits after writing down nearly $1.5 billion in assets due to higher inflation and the Russian-Ukrainian War.
Bond yields fell. The yield on the 10-year Treasury fell to 2.68% early Thursday from 2.72% late Tuesday.
Inflation may be peaking but will likely stick around for awhile as cost pressures filter their way through the markets.
Russia’s invasion of Ukraine has raised volatility for energy prices since oil supplies already were tight as demand rises with the waning of the pandemic. U.S. crude oil prices are up roughly 40% for the year, driving up gasoline prices and giving inflation’s a bigger hit on people’s wallets.
“On the geopolitical front, the Ukraine crisis continues to weigh on sentiment, with markets watching for any signs of further deterioration," Anderson Alves of ActivTrades said in a commentary.
Companies in various industries have been raising prices to offset rising costs and maintain or increase their margins.
Investors will get more details on how companies and consumers are dealing with inflation as more companies report their latest financial results. Insurer UnitedHealth Group and banks Wells Fargo and Citigroup are due to report their earnings on Thursday.
Also Thursday, the Commerce Department will release its retail sales report for March, which will show whether and where consumers are pulling back on spending.
In energy trading U.S. benchmark crude oil slipped $1.11 to $103.14 per barrel in electronic trading on the New York Mercantile Exchange. It jumped $3.65 to $104.25 per barrel on Wednesday. Brent crude, the standard for international pricing of oil, lost 67 cents to $108.11 per barrel.
The U.S. dollar slipped to 125.43 Japanese yen from 125.63 yen. The euro rose to $1.0913 from $1.0888.