By Kosaku Narioka
Japanese stocks are leading Asian markets higher on the prospect of a steady U.S. economic recovery.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +1.20% was recently up 0.7% and South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +1.38% was 0.1% higher. Taiwan’s stock market index was 0.04% higher. The Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.43% opened down 0.2%.
Expectations grew for gradual U.S. growth after Federal Reserve Bank of St. Louis President James Bullard said Thursday the central bank is edging closer to raising rates. “The next rate increase may not be far off, provided that the economy evolves as expected,” he said.
Soichiro Monji, general manager of economic research at Daiwa SB Investments, said the selloffs earlier this year, which factored in a U.S. recession, were overblown and a steady U.S. economic recovery is unlikely to raise concerns about capital flight from slowing economies in Asia.
“A gradual U.S. recovery would be positive [for stock markets across Asia] because the markets priced in a far worse scenario,” he said.
A U.S. economic recovery and a higher dollar compared with the yen are particularly supportive for Japanese manufacturers that export goods abroad. A weaker yen gives them advantages in trade.
In Tokyo, office equipment and camera maker Canon Inc. /zigman2/quotes/207639533/delayed JP:7751 +0.32% was recently up 2.1%. Tractor maker Kubota Corp. /zigman2/quotes/201871403/delayed JP:6326 +3.38% was 3.1% higher.
The dollar was recently at 113.20 yen, compared with ¥112.87 late Thursday in New York.