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Asian stocks rose thanks to the Fed’s interest rate hopes despite China’s concerns

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TOKYO (AP) – Asian stocks rose on Thursday, although optimism about the Federal Reserve rolling back aggressive interest rate hikes was offset by some uncertainty about coronavirus restrictions in China.

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Trading was relatively quiet in Asia ahead of the US markets closed for Thanksgiving. Standards rose in Japan, Australia and South Korea. They rose in Hong Kong but fell in Shanghai. Oil prices fell.

“A headwind for Asian markets is the case of COVID in China, as investors appear to be avoiding domestic assets and commodities as the country experiences near-record numbers of COVID cases. “Broad constraints will continue to weigh on risk sentiment and macro fundamentals, weighing on risk sentiment,” Anderson Alves of ActivTrades said in a comment. It puts pressure on the outlook for equities and cyclical commodities.”

Japan’s Nikkei 225 index jumped 1.0% to close at 28,383.09. Australia’s S&P/ASX 200 rose 0.1% to 7,241.80. South Korea’s Kospi Index rose about 1.0%, to 2,441.33. Hong Kong’s Hang Seng rose 0.6% to 17,626.00, while the Shanghai Composite fell 0.3%, to 3,089.31.

Stocks closed broadly higher on Wall Street minutes after the latest Federal Reserve policy meeting showed that central bank officials agreed that a rate hike would likely be appropriate “soon.”

This indicates that policy makers are seeing signs that inflation may decline as the economy slows as the cost of borrowing rises.

The S&P 500 rose 0.6% to 4,027.26, while the Dow Jones Industrial Average rose 0.3%, to 34,194.06. The Nasdaq Composite Index closed up 1%, at 11,285.32.

The Russell 2000 index of smaller companies rose, adding 0.2% to close at 1,863.52.

Long-term Treasury yields fell. The yield on 10-year Treasury notes, which affects mortgage rates, fell to 3.69% from 3.76%.

At their November 1-2 meeting, Fed officials expressed uncertainty about how long it might take to raise interest rates to slow the economy enough to tame inflation. In a press conference afterward, Chairman Jerome Powell stressed that the Fed was nowhere near declaring victory in its battle to rein in soaring inflation. Other Fed officials indicated in the weeks after the meeting that additional increases were still necessary.

The central bank’s benchmark interest rate is currently 3.75% to 4%, up from near zero in March. And it warned that it may eventually have to raise interest rates to previously unimagined levels to cool the hottest inflation in decades.

Wall Street is closely watching the latest economic data and inflation for any signs that may allow the Fed to moderate interest rate increases in the future. Investors are worried that the Fed could hit the brakes on economic growth and lead to a recession.

Consumer spending and the labor market have so far been strong points in the economy. That has helped as a bulwark against a recession, but it also means that the Fed may have to stay aggressive.

Technology stocks and some major retailers helped account for a large share of the gains in the benchmark S&P 500 on Wednesday. Chipmaker Nvidia rose 3% and Target rose 3.5%.

Homebuilders rose broadly after a government report showed that US new home sales rose more-than-expected in October. Lennar rose 1.6% and DR Horton increased 2.2%.

In energy trading, US crude lost 47 cents to $77.47 a barrel. Brent crude, the international benchmark, fell 66 cents to $84.75 a barrel.

In currency trading, the US dollar fell to 138.87 yen from 139.57 yen. The price of the euro was at $1.0435, up from $1.0399.

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Yuri Kageyama is on Twitter

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