TOKYO (AP) — Asian shares were mixed on Friday, mirroring the finish on Wall Street, although export-related Tokyo stocks got a boost from a strengthening dollar.
Benchmarks rose in Tokyo, Sydney and Shanghai, but fell in Seoul and Hong Kong.
The yen has weakened amid speculation that the Bank of Japan might go slowly on changing its lax policy stance as it assesses the impact of Monday’s major earthquake in central Japan.
The U.S. dollar rose to 144.90 Japanese yen from 144.63 yen. The euro fell to $1.0939 from $1.0947.
Japan's benchmark Nikkei 225 added 0.7% to 33,521.67.
Hong Kong’s Hang Seng shed 0.1% to 16,622.45, while the Shanghai Composite edged 0.1% lower to 2,950.61.
Australia's S&P/ASX 200 gained nearly 0.1% to 7,497.90. South Korea's Kospi lost 0.1% to 2,583.83.
A weak yen is a boon for Japanese exporters, like the automakers, because it boosts the value of their overseas earnings. Toyota Motor Corp. stock gained 2.3% while Honda Motor Co. added 2.5%.
“Sentiments are back on some wait-and-see, given that we may have to see a substantial weakening of the U.S. labor market to justify market pricing of a rate cut,” said Yeap Jun Rong, market analyst at IG.
Wall Street stocks finished mixed, carrying the weak start for 2024 into a third day.
The S&P 500 slipped 0.3% to 4,688.68 and is on track for its first losing week in the last 10. The Dow Jones Industrial Average eked out a gain of less than 0.1%, to 37,440.34, and the Nasdaq composite fell 0.6% to 14,510.30.
Walgreens Boots Alliance sank 5.1% after it nearly halved its dividend so it could hold onto more cash. That helped overshadow gains for airlines and cruise-ship operators, which recovered some of their sharp losses from earlier in the week. Carnival steamed 3.1% higher, and United Airlines got a 2.4% lift.
U.S. stocks have broadly regressed this week after rallying into the end of last year toward record heights. Critics said the market was due for at least a breather following its big run, which fed on hopes inflation has cooled enough for the Federal Reserve to cut interest rates sharply this year.
Rate cuts give a boost to prices for stocks and other investments, while also relaxing the pressure on the economy and financial system. Treasury yields in the bond market have already eased since autumn on expectations for such cuts, releasing pressure on the stock market.
But Treasury yields rose Thursday following reports showing the job market may be stronger than expected. The economy is in a delicate phase where investors want it to remain solid, but not too hot.
A healthy job market is of course good for workers and stamps out worries about an imminent recession. But too much strength could prod the Federal Reserve to keep interest rates high because it could keep upward pressure on inflation. And the Fed has already hiked its main interest rate to the highest level since 2001.
One report from the U.S. government on Thursday showed fewer U.S. workers filed for unemployment benefits last week than expected. Another from ADP Research Institute said private employers accelerated their hiring last month by more than economists expected.
A more comprehensive report on the jobs market from the U.S. Labor Department will arrive on Friday. Economists expect that to show U.S. hiring slowed to 160,000 jobs last month from 199,000 in November.
Traders are betting the Federal Reserve will cut interest rates by twice as much this year as the central bank has indicated. Wall Street is also thinking the first cut could come as soon as March, and a stronger-than-expected economy makes such predictions less realistic. Critics had already called them overly aggressive.
On Wall Street, Peloton Interactive jumped 13.9% after it announced a partnership to bring its workout content to TikTok.
APA fell 7.3% after it said it will buy Callon Petroleum in an all-stock deal valued at roughly $4.5 billion, including debt. Callon Petroleum gained 2.9%.
In energy trading, benchmark U.S. crude added 35 cents to $72.54 a barrel. Brent crude, the international standard, rose 22 cents to $77.81 a barrel.
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AP Business Writer Stan Choe contributed.
Yuri Kageyama is on X https://twitter.com/yurikageyama
Yuri Kageyama, The Associated Press
