Japanese Stocks Surge, Strong Wall Street Performance

Japanese stocks surged, and the Nikkei led Asian markets with a 3.88% gain, buoyed by a Wall Street rally and strong U.S. economic data. Hong Kong and Australia also saw gains.

Global Markets:

• Asian Stock Markets: Nikkei up 3.88%, Shanghai Composite down 0.08%, Hang Seng up 1.73%, ASX up 1.37%
• Commodities: Gold at $2494.35 (+0.06%), Silver at $28.23 (-0.40%), Brent Oil at $80.7 (-0.26%), WTI Oil at $77.79 (-0.34%)
• Rates: U.S. 10-year yield at 3.911%, U.K. 10-year yield at 3.9241%, Germany 10-year yield at 2.241%

News & Data:

• (USD) Core Retail Sales m/m: 0.4% vs. 0.1% expected
• (USD) Retail Sales m/m: 1.00% vs. 0.4% expected
• (USD) Unemployment Claims: 227K vs. 236K expected

Japanese Stocks Surge, Strong Wall Street Performance

Markets Update:

Japan’s stock markets spearheaded gains across Asia on Friday, with the Nikkei 225 soaring 3.88% and achieving its most robust weekly performance in four years. A rally on Wall Street, driven by positive economic data, fueled this surge and eased recession concerns.

In the U.S., retail sales for July came in at 1.00%, significantly exceeding the Dow Jones estimate of 0.4%. Weekly jobless claims also dropped to 227,000, below the expected 236,000, further boosting market sentiment. Stephanie Roth, chief economist at Wolfe Research, commented, “Today’s solid retail sales and claims data is a reminder that the sky is not falling on the U.S. economy. While economic momentum has cooled, a recession does not appear imminent.”

Asian markets mirrored this positive momentum, with Japan’s broader Topix index gaining over 2%. South Korea’s Kospi rose 1.75% following a public holiday, while the Kosdaq climbed 0.94%. Australia’s S&P/ASX 200 also saw a 1.18% gain, although Reserve Bank of Australia Governor Michelle Bullock warned against expecting rate cuts soon due to persistently high inflation.

The Hang Seng index advanced by 1.69% in Hong Kong, and mainland China’s CSI 300 posted a modest gain. Singapore’s non-oil domestic exports surged 15.7% in July, rebounding sharply from June’s decline and surpassing the 1.2% growth forecast. Total trade saw a robust 13.7% increase, bolstered by rising exports and imports.

As markets in Taiwan and Hong Kong await second-quarter GDP data, U.S. indices continued their upward trajectory overnight, with the Dow Jones, S&P 500, and Nasdaq Composite all posting notable gains.

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