Asian stocks mostly higher, Nikkei falls ahead of Japan's weekend election

Asian stocks saw gains on Friday, except in Japan where the Nikkei index fell ahead of a weekend election. Investors are waiting for the outcome as political uncertainty and inflation data weigh on the markets.

Asian markets were broadly higher on Friday, though Japan’s Nikkei fell as investors awaited the results of Sunday’s snap election. According to AP, Japanese Prime Minister Shigeru Ishiba called the election shortly after taking office, aiming to bolster support amidst a political funding scandal that has recently disrupted the ruling Liberal Democratic Party’s stability. This uncertainty, combined with Japan’s long-standing low interest rate policy, has left markets hesitant as they await the Bank of Japan’s next moves.

In Tokyo, the Nikkei 225 index dropped by 1% to 37,771.79, while the yen strengthened against the dollar, trading early Friday at 151.64 yen, down from 151.89 yen. Japan’s core inflation in Tokyo dropped to 1.8% in October, below the central bank’s 2% target for the first time in five months. As reported by AP, this figure reinforces market expectations that the Bank of Japan may keep interest rates steady in its upcoming policy meeting.

Elsewhere in Asia, Hong Kong’s Hang Seng index rose by 1.1% to 20,720.60, while the Shanghai Composite added 0.8%, closing at 3,307.14. China’s central bank kept its medium-term lending rate at 2% and issued 700 billion yuan ($98.3 billion) in one-year medium-term lending facility loans to financial institutions, according to a bank statement.

In other major Asian markets, South Korea’s Kospi increased by 0.3% to 2,590.30, and Australia’s S&P/ASX 200 edged up 0.1% to 8,216.50. Taiwan’s Taiex index also saw gains, rising by 0.3%.

Across the Pacific, US markets showed mixed results on Thursday. The S&P 500 ended its first three-day losing streak since early September, inching up 0.2% to 5,809.86, though trading was mixed. The Dow Jones Industrial Average slipped 0.3% to 42,374.36, while the tech-heavy Nasdaq Composite climbed 0.8% to 18,415.49, helped by Tesla’s notable performance.

Tesla led gains in the US market, surging 21.9% following an earnings report that exceeded profit expectations. AP reported that Tesla’s CEO Elon Musk predicted 20%-30% sales growth in the coming year, despite revenue falling slightly short of analysts’ forecasts. This marked Tesla’s best trading day since 2013.

Boeing, meanwhile, faced setbacks, dropping 1.2% as its machinists voted to continue their strike, which has severely impacted production. Over 60% of union members rejected a proposed contract, extending the strike into its sixth week.

As noted by AP, US markets saw broader declines earlier this week as higher Treasury yields put pressure on stock prices. The 10-year Treasury yield, a key indicator for investors, eased to 4.20% from 4.25% on Wednesday following the release of mixed unemployment data. The report indicated fewer unemployment claims, suggesting stable job conditions, but the total number of claimants reached a nearly three-year high.

Other US economic reports provided additional insights. A preliminary S&P Global report suggested slight growth in US business activity, with gains in the service sector helping offset manufacturing weaknesses. According to AP, the report showed a general rise in business confidence ahead of the US presidential election. New home sales also performed better than expected, adding a note of optimism in the housing sector.

In the oil market, prices moved higher on Friday amid these mixed signals in global equities. As investors continue to monitor inflation, interest rates, and economic data, markets globally are poised for further adjustments following key upcoming events, including Japan’s election and the US presidential race.

(With inputs from AP)

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