On Friday, September 12th, Asian stock markets generally rose, following the historical highs set by Wall Street. Earlier, the number of initial jobless claims in the United States showed the largest increase in four years, coupled with inflation data in line with expectations, further strengthening the market’s expectations for the Federal Reserve (Fed) to initiate its first interest rate cut of the year next week.
The Nikkei 225 index in Japan closed at 44,768.12 points on Friday, up 0.89%, reaching a high of 44,888.02 points during the trading day, setting a new historical closing high for three consecutive trading days. Semiconductor companies such as Tokyo Electron, Sony Group, and Fast Retailing drove the overall market.
The Hang Seng Index in Hong Kong was at 26,395.63 points, up 1.19%. Reports stimulating the market suggested that Beijing may order state-owned banks to assist local governments in repaying overdue debts. However, the Shanghai Composite Index was at 3,870.60 points, down slightly by 0.12%.
Other Asia-Pacific markets also saw mostly positive movements. The Kospi Index in South Korea closed at 3,395.54 points, up 1.54%.
Australia’s S&P/ASX 200 index rose by 0.7%, closing at 8,867.90 points.
The Sensex Index in Mumbai, India, rose by 0.3%.
Taiwan’s weighted index closed at 25,474.64 points, up 1.03%.
On Thursday, all four major U.S. indices simultaneously hit record highs, with the Dow rising by 617 points, a 1.4% increase, closing above the 46,000-point milestone for the first time at 46,108.00 points.
The S&P 500 rose by 0.85%, closing at 6,587.47 points. The Nasdaq Composite rose by 0.72%, closing at 22,043.08 points. The Philadelphia Semiconductor Index rose by 0.63%, closing at 5,995.39 points.
Stephen Inness, an analyst at SPI Asset Management, stated, “What is now propelling the market is not just another rebound, but a clear trend of the Fed shifting to dovishness. This trend… is virtually lifting every ship in every harbor.”
The latest U.S. data indicates a cooling job market. Last week, initial claims for unemployment benefits recorded the largest single-week increase in four years. On the other hand, the Consumer Price Index (CPI) in August rose by 2.9% year-on-year, the fastest in seven months, but still broadly in line with market expectations, higher than July’s 2.7%.
Against this backdrop, the market generally expects the Fed to announce its first interest rate cut of the year, by 25 basis points, at its policy meeting on September 17.
Analysts point out that the Fed is no longer concerned about runaway inflation but is more focused on a weak labor market, and the bet on a “large rate cut” of 50 basis points is gradually diminishing.
Investors are also adjusting their expectations for the magnitude of rate cuts before the year-end, believing that the overall path of rate cuts will be more moderate than previously estimated.
The latest U.S. Dollar Index is at 97.643, up 0.1%, but is expected to decline for the second consecutive week. The dollar against the yen rose by 0.2%, at 147.50. The U.S. and Japanese governments issued a joint statement on Friday, reaffirming that exchange rates should be determined by the market, and emphasizing that “excessive volatility and disorderly movements are unwelcome.”
The euro against the dollar is at 1.1724, down by 0.1%; the pound is at $1.3557, down by 0.1%; offshore RMB is at 7.1170, down by 0.1%. The Australian dollar remains steady at $0.666, hovering near a ten-month high; the New Zealand dollar edged down by 0.1%, at $0.5968.
In terms of commodities, U.S. West Texas Intermediate (WTI) crude oil fell by $0.53, at $61.84 per barrel; Brent crude oil fell by $0.51, at $65.86 per barrel.
The European Central Bank (ECB) decided in its Thursday meeting to keep the policy rate unchanged at 2% for the second consecutive time. ECB President Christine Lagarde said that economic risks in the eurozone have become “more balanced.”
Currently, the market is awaiting Fitch Ratings’ announcement of the latest rating on France’s public finances after the market’s close on Friday.
The Trump administration is seeking to remove Federal Reserve Board member Lisa Cook from her position before next week’s Fed meeting.
The Department of Justice on Thursday filed a motion with the Washington Court of Appeals seeking to overturn a lower court’s temporary injunction. The injunction ruled that Cook cannot be removed from her position during the litigation.
Last month, Cook was charged by the Federal Housing Finance Agency Director with involvement in mortgage fraud, and Trump announced her dismissal. Cook subsequently filed a lawsuit against Trump, stating that the dismissal was based on “baseless accusations” and was a move by the president to gain more seats on the board.
The Department of Justice criticized the lower court’s ruling, stating that the order “overturned the president’s actions pursuant to Article II of the Constitution based on a series of legal errors and should be suspended during the appeal period.”