From Gina Lee
Investing.com – Asia Pacific stocks fell for the most part on Friday morning, but hovered near record levels as investors continued to assess the Fed’s assurance that an economic recovery can be achieved without the one that got out of hand Boost inflation.
China fell 0.72% to 11:11 p.m. ET (3:11 p.m. GMT) and the decline was 1.06%. The consumer and buyer price indices data for March, released earlier in the day, was with the CPI down 0.5% and up 0.4% while the CPI grew 4.4% yoy.
Hong Kong fell 0.84%.
Japan rose 0.29%, while South Korea fell 0.32% and Australia fell 0.24%.
Fed chairman Jerome Powell signaled during an International Monetary Fund event on Thursday that the central bank is nowhere near reducing its support for the US economy. He also said that while the economic reopening could result in a temporary rise in prices, it will be temporary and will not represent inflation.
Although the comments showed the Fed’s commitment to a cautious policy for the time being, Powell added that the Fed would react if inflation expectations were “permanently and materially” above tolerable levels.
Meanwhile, government bonds received a boost, with the benchmark’s 10-year yield trading trading around a two-week low. The comments of Powell’s colleague, Lorie Logan, executive vice president of the New York Fed, also sparked the discussion about increased purchases by the Fed in 20-year government bonds, which then outperformed.
However, the disappointment released on Thursday showed that the economic recovery from COVID-19 is far from over. The data said the number of claims rose unexpectedly to 744,000, more than the 680,000 claims in forecasts made by Investing.com and the 728,000 claims filed the previous week.
“Unemployment claims are setting the tone in the market that things may not be as strong as people think and we are still a long way from recovery,” Tim Ghriskey, chief investment strategist for Inverness Counsel, told Reuters.
Other investors were more optimistic.
“Many investors are concerned about the stock market highs, but that doesn’t mean they can’t get higher and the economic conditions are certainly created for a positive equity environment,” said Xi Qiao, general manager, UBS Global Wealth Management Bloomberg.
On the COVID-19 frontline, more than 726 million COIVD-19 shots were administered worldwide as of April 9. However, several countries, including China, face supply shortages as they vaccinate their populations.
The outlook for the US has improved significantly, but remains at risk from potential setbacks in the global economy as vaccine adoption “has not been nearly as robust in many countries,” San Francisco Fed president Mary Daly told Bloomberg .
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