Asian Stocks Up as Easing Curbs in China Offer Hopes
2022.06.06 05:45
By Zhang Mengying
Investing.com – Asia Pacific stocks were mostly up on Monday morning as easing COVID-19 curbs in China offered hope for global economic recovery. Also, upbeat U.S. job reports left a door open for U.S. Federal Reserve to maintain assertive on inflation.
Japan’s Nikkei 225 gained 0.28% by 10:23 PM ET (2:23 AM GMT), and South Korea’s KOSPI was up 0.44%.
In Australia, the ASX 200 fell 0.34%. Reserve Bank of Australia will hand down its policy decision on Tuesday.
Hong Kong’s Hang Seng Index gained 0.80%
China’s Shanghai Composite was up 0.25% while the Shenzhen Component gained 0.47%. China Caixin services purchasing managers’ index (PMI) released earlier in the day rose to 41.4 in May from 36.2 in April, contracted for a third straight month.
Beijing is easing more COVID-19 curbs, and opening up restaurants and cinemas, which adds hopes for an economic recovery.
Oil rose after Saudi Arabia raised higher prices for shipments to Asia.
Investors are worried that tightening monetary policies might cause a recession. However, the U.S. Job report released on Friday showed that 390,000 jobs were added in May, which is above the forecasts prepared by Investing.com and 436,000 recorded in April.
While the upbeat job report eases some concerns that the U.S. economy is slowing sharply, it also strengthened the view that the Fed will keep cooling inflation by interest rate hikes. Some analysts thought the Fed was on track for a soft landing.
“May’s numbers came in about as good as the Fed could expect,” Barclays (LON:BARC) economist Jonathan Millar told Reuters.
“It’s a good sign that the Fed’s plans to cool the labor market are playing out favorably so far, with solid gains in employment continuing to generate steady income gains that will help allay recession worries, for the time being.”
Cleveland Fed President Loretta Mester said Friday that she doesn’t see enough evidence that inflation has peaked and is on board with supporting multiple interest rate increases.
The European Central Bank (ECB) will hand down its policy decision on Thursday. It will announce an end to bond purchases this week, joining global peers in tightening monetary policy in the face of high inflation.
On the data front, the U.S. consumer price index (CPI) alongside China’s CPI and producer price index (PPI) is due on Friday.
