Stock market today: Asia shares gain, tracking Wall St rally

Shares advanced in Asia on Friday after Wall Street rallied to its best day since January.

Gains in Asian markets were more modest as traders waited to see what the Bank of Japan would do in its first policy meeting since Kazuo Ueda took the helm.

The central bank kept its ultra-lax policy unchanged, and the Japanese yen weakened sharply against the U.S. dollar. The dollar rose to 134.92 yen from 133.96 yen earlier in the day.

“With extremely high uncertainties surrounding economies and financial markets at home and abroad, the bank will patiently continue with monetary easing while nimbly responding to developments,” the BOJ said in a statement.

Rising prices are putting pressure on the central bank to tighten its ultra-lax monetary policy: Japan reported inflation excluding volatile fresh food costs was at 3.5% in March.

Tokyo’s Nikkei 225 index added 1.1% to 28,764.98 and the Hang Seng in Hong Kong gained 0.6% to 19,951.51.

The Shanghai Composite index surged 0.7% to 3,307.68, while the S&P/ASX 200 in Sydney edged 0.2% higher to 7,308.40.

The Kospi in Seoul lost 0.1% to 2,491.50, and benchmarks in Southeast Asia also fell.

On Thursday, U.S. benchmarks advanced after Meta Platforms became the latest Big Tech company to blow past profit forecasts.

The S&P 500 rose 2% to 4,135.35 and the Dow rose 1.6% to 33,826.16. The U.S. economy slowed more than expected in January-March, but showed signs of resilience.

The Nasdaq composite led the market with a 2.4% gain, to 12,142.24.

Facebook’s parent company did some of the heaviest lifting, jumping 13.9%. Meta beat analysts’ estimates for profit during the first three months of the year and also gave a forecast for revenue that topped expectations.

It joined Amazon followed suit after trading closed for the day. They’re among the most influential stocks on Wall Street indexes because they’re some of the biggest.

The majority of companies have been beating forecasts so far this earnings reporting season. Hasbro climbed 14.6%, and Comcast rose 10.3% after they also topped Wall Street’s estimates. But expectations were broadly low coming into this reporting season because of still-high inflation, much higher interest rates and a slowing economy.

A report on Thursday gave the first indication of just how much the U.S. economy is slowing: down to an estimated 1.1% growth at an annual rate during the first three months of 2023 from 2.6% at the end of last year. That was worse than expected, but the economy may be in better shape than it looks, since growth in spending by consumers and other areas accelerated and much of the weakness was related to businesses thinning out inventories.

A measure of inflation that the Fed likes to use, however, came in hotter than hoped.

A separate report showed that fewer workers applied for unemployment benefits last week, raising hopes that the job market may remain resilient as other areas slow.

Investors took the data to mean the Federal Reserve next week will see the economy is still strong enough to handle another hike to interest rates at its next meeting.

The Fed has been raising rates at a furious pace since early last year, up to the highest level since 2007 from its record low to try to get price increases under control.

But high rates slow the entire economy and hurt prices for investments. They’ve hit some areas of the economy particularly hard, including the housing and manufacturing industries.

Banks have also come under pressure. Wall Street’s spotlight has been particularly harsh on First Republic Bank, whose stock has more than halved this week after it disclosed how much in deposits its customers pulled following the second- and third-largest U.S. bank failures in history last month.

Its stock steadied a bit Thursday, rising 8.8%.

The larger worry is that the banking industry’s struggles could lead to a pullback in lending across the economy.

That has many investors preparing for a possible recession this year, which could mean further hits to corporate profits.

Caterpillar, considered a bellwether for the global economy, slipped 0.9% despite reporting stronger profit and revenue for the latest quarter than expected.

In other trading Friday, U.S. benchmark crude oil added 15 cents to $74.91 per barrel in electronic trading on the New York Mercantile Exchange. It gained 46 cents to $74.76 per barrel on Thursday.

Brent crude, the international standard, picked up 19 cents to $78.41 per barrel.

The euro slipped to $1.1018 from $1.1026.

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AP Business Writer Stan Choe contributed.