Asian Stocks Rise as Investors Digest Fed Powell’s Latest Comments

Asia-Pacific stocks traded higher on Friday, with markets turning calmer following the European Central Bank’s record interest rate hike and hawkish comments from the U.S. Federal Reserve Chair Jerome Powell, which reinforced bets on rapid tightening ahead.

As of 9.39 a.m. Thai time, the Nikkei 225 in Japan rose 0.40% and the Kospi in South Korea was up 0.33%.

In Australia, the S&P/ASX 200 also gained 0.41%.

The Hang Seng Index in Hong Kong rose 2.06%, while in mainland China, the Shanghai Composite added 0.30%.

After a rough start to the week, the major Wall Street indices rallied slightly overnight. Futures for the S&P 500 and the Nasdaq both increased by 0.3% and 0.5%, respectively, as investors seemed more comfortable taking risks again.

Fed Chair Jerome Powell said on Thursday that the bank is “strongly committed” to reducing inflation, but that there is still optimism that it can be done without the “very high social costs” linked to previous inflation battles.

Meanwhile, the European Central Bank (ECB) raised its three official interest rates by 75 basis points each, the move that was widely expected as the region is running with a 40-year high inflation rate at 9.1% in August of 2022 from 8.9% in July.