By V. Phani Kumar, MarketWatch
An earlier version misstated the extent of the Nikkei Stock Average’s fall from its peak on May 23. The corrected version of the report follows.
HONG KONG (MarketWatch) — Asian stocks rebounded Friday as eased worries about the Federal Reserve’s monetary policy and an improvement in U.S. economic data sparked relief buying across the region, with Japanese and Southeast Asian equities witnessing strong gains.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +2.55% climbed 1.9%, taking back some ground after the previous day’s 6.4% plunge, even as the dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.0329% stayed under the ¥95 handle for most of the session after rising well above that level earlier in the day.
At Friday’s close, the Nikkei Average was 20.4% lower than its peak on May 23, ending for a second straight day in a so-called bear-market, although it emerged from that territory earlier in the day. A bear market is generally defined as a price decline of 20% or more within a two-month period.
The bounce came after stocks on Wall Street snapped a three-day losing streak, aided by a report in The Wall Street Journal that the Fed was likely to use its next policy meeting to quell fears about raising short-term interest rates in the near future. Data on U.S. retail sales and new jobless claims also signaled an improvement.
“We are stuck in a ‘Goldilocks world’ as the continued seesawing between concerns about market-related policy and the real U.S. economy [are] likely to persist for the remainder of the year,” said Perpetual head of investment market research Matthew Sherwood.
Southeast Asian stocks posted the biggest gains in the region. Thailand’s SET jumped 3.5% and Indonesia’s JSX /zigman2/quotes/210597981/delayed ID:JAKIDX +0.94% gained 3.3% in afternoon trade, while the Philippine benchmark PSEI /zigman2/quotes/210597949/delayed PH:PSEI +1.76% ended the session 2.1% higher.
On Thursday, the PSEI had plunged 6.7%, while the SET and the JSX fell 2.1% and 1.9%, respectively.
Meanwhile, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +2.57% added 0.4%, while the Shanghai Composite /zigman2/quotes/210598127/delayed CN:SHCOMP +1.78% advanced 0.6% for its first higher finish in nine trading days.
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“The key to market trends would be [U.S.] economic data not coming in super-hot or super-cold. Instead, it needs to be middle-ground, which enables earnings growth to persist without concerning the hawks in the U.S. Fed,” Perpetual’s Sherwood said.
Despite the day’s gains, most regional markets suffered big losses during the week, with the Philippine index shrinking 6.9%, the Hang Seng Index losing 2.8%, the Shanghai Composite dropping 2.2%, the Kospi falling 1.8% and the Nikkei shedding 1.5%.
Australia’s S&P/ASX 200 was the only major benchmark to end higher during the week, with a gain of 1.1%.
Many Japanese exporters gained in Tokyo despite the firm yen. Shares of Mazda Motor Corp. /zigman2/quotes/204777714/delayed JP:7261 +3.72% /zigman2/quotes/206326885/delayed MZDAY +1.45% climbed 1.7% and Casio Computer Co. /zigman2/quotes/202492162/delayed JP:6952 +1.08% /zigman2/quotes/206719136/delayed CSIOY +0.14% added 2.5%.