Tokyo, Jan. 27 (BNA): Asian stocks rose on Friday, tracking a rally on Wall Street after reports that the economy and corporate earnings may be better than expected.
In Tokyo, data showed that the core consumer price index rose 4.3%, slightly above the expected 4.2%, and above the Bank of Japan’s target of 2%, according to the Associated Press.
Stocks on Wall Street jumped to their highest level in nearly eight weeks after the Commerce Department reported that the US economy grew at an annual pace of 2.9% in the fourth quarter, ending 2022 with momentum despite rising interest rates and widespread fears of a looming recession. This beat economists’ expectations for an expansion of 2.3%.
The strong data suggests that the economy can withstand a storm of surprise rate hikes by the Federal Reserve last year, plus at least one hike expected next week, without collapsing into a deep recession.
Higher rates intentionally slow the economy by making it more expensive to borrow to buy a house, car, or something else on credit. They also lower the prices of stocks and other investments.
A stronger-than-expected economy, particularly in the labor market, may prompt the Federal Reserve to keep interest rates higher for longer to ensure inflation is truly crushed.
The Fed has said repeatedly that it plans to do so, at least through the end of the year, though many investors don’t seem to be buying it.
In energy trading, the price of US crude rose 21 cents to $81.22 a barrel in electronic trading on the New York Mercantile Exchange. It lost 14 cents to $81.01 on Thursday.
Brent crude, the international pricing benchmark, rose 17 cents to $87.64 a barrel in London.
In currency trading, the US dollar fell to 129.83 yen from 130.23 yen. The price of the euro reached $1.0877, down from $1.0890.