Asian shares mixed as jitters calm over global markets while uncertainty lingers

TOKYO (AP) — Asian shares traded mixed Wednesday, as Japan’s benchmark perked but quickly ran out of steam from news the prime minister won’t seek re-election as head of the ruling party.

Japan’s benchmark Nikkei 225 was down 0.1% in morning trading at 36,192.93. Australia’s S&P/ASX 200 gained 0.5% to 7,869.40. South Korea’s Kospi added 0.7% to 2,640.10. Hong Kong’s Hang Seng lost 0.3% to 17,127.65, while the Shanghai Composite shed 0.4% to 2,857.90.

Japan’s ruling Liberal Democratic Party controls the majority in the lower house of parliament, which picks the nation’s leader. Prime Minister Fumio Kishida’s public support ratings are sagging lately amid a scandal involving shady money, as well as his overall lack of popularity with voters, according to Japanese media polls.

“We must show the Liberal Democratic Party will change. This will be the first step that will demonstrate that clearly,” Kishida said in announcing his decision.

Speculation is rife the party will turn to a younger politician as the next leader, with names like Shinjiro Koizumi, the son of former Prime Minister Junichiro Koizumi, being tossed around. The younger Koizumi is still in his 40s, marking a departure from the elderly prime ministers of the past.

The overnight rise on Wall Street also boosted investor optimism. Although Japanese share prices rose at one point in morning trading, they sank on profit-taking, although prices soon recovered.

A cautious mood remains on global markets amid uncertainty about the U.S. economy. Next week brings a slew of economic data about Japan, including machinery orders, trade statistics, tallies on travelers from abroad, unemployment and consumer prices. Analysts think the Japanese economy basically remains on solid ground, thanks to the strong performance of some Japanese companies.

U.S. stocks rallied to one of their best days of the year after the first of several highly anticipated reports on the economy this week came in better than expected.

The S&P 500 jumped 1.7% for its third-best day of 2024 after the U.S. government reported inflation at the wholesale level slowed last month by more than economists expected. The Dow Jones Industrial Average rose 408 points, or 1%, and the Nasdaq composite clambered 2.3% higher.

Inflation in the U.S., which has been a worry for years, finally appears to be slowing. That means the U.S. Federal Reserve may ease up on high interest rates.

Treasury yields eased in the bond market following the inflation data, as traders remain convinced the Fed’s meeting next month will bring the first cut to interest rates since the COVID crash of 2020. The yield on the 10-year Treasury fell to 3.84% from 3.91% late Monday.

Investors still have their eyes on the U.S. government’s update on inflation, expected later in the day. A report showing how much U.S. shoppers are spending at retailers comes Thursday.

The economy is still growing, and many economists don’t expect a recession, but a sharp slowdown in U.S. hiring last month raised questions about its strength.

Starbucks soared 24.5% after it convinced Brian Niccol to leave his job as CEO of Chipotle Mexican Grill to take over the coffee chain. Chipotle, meanwhile, dropped 7.5%. Niccol has been its chief executive since 2018 and its chairman since 2020, and he helped its stock rise more than 240% for the five years through Monday.

All told, the S&P 500 rose 90.04 points to 5,434.43. The Dow added 408.63 to 39,765.64, and the Nasdaq composite gained 407.00 to 17,187.61.

In energy trading, benchmark U.S. crude rose 50 cents to $78.85 a barrel. Brent crude, the international standard, gained 44 cents to $81.13 a barrel.

In currency trading, the U.S. dollar inched down to 146.82 Japanese yen from 146.84 yen. The euro cost $1.0994, virtually unchanged from $1.0995.

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Yuri Kageyama is on X: https://x.com/yurikageyama