TOKYO (AP) Asian stocks were mixed in quiet trading Friday after Wall Street's continued frenzy over artificial intelligence technology pushed Wall Street indexes to new record highs.
Japan's benchmark Nikkei 225 index jumped 0.7% to 38,998.04 after the Bank of Japan kept its monetary policy intact, although it said it intended to start reducing its purchases of government bonds as it relieves get out of its ultra-lax position.
Even if the BOJ wants to make it clear that the direction to go is one of tightening, the key guiding principle is gradual, Tan Jing Yi of Mizuho Bank said in a commentary.
Australia's S&P/ASX 200 index fell 0.3% to 7,723.30. South Korea's Kospi edged up 0.1% to 2,758.21. Hong Kong's Hang Seng slipped 0.7% to 17,988.24, while the Shanghai Composite fell 0.2% to 3,021.88.
On Thursday, the S&P 500 Index added 0.2% to its all-time high set the day before, closing at 5,433.74, although the majority of its values weakened. The Nasdaq Composite Index climbed 0.3% from its own record, ending at 17,667.56, led by gains in technology stocks.
The Dow Jones Industrial Average fell 0.2% to 38,647.10.
Treasury yields fell again in the bond market as traders became convinced that inflation is slowing enough to cause the Federal Reserve to cut interest rates later this year.
THE latest inflation update showed that prices paid at the wholesale level were not as bad as economists expected. They actually fell from April to May, when economists were forecasting an increase.
This followed a surprising Wednesday update that showed inflation at the consumer level was lower than expected. Federal Reserve Chairman Jerome Powell called the report encouraging and said policymakers need more such data before lowering their key interest rate from the most punitive level in two decades.
“It’s a question of when they will cut, not if,” said Niladri Neel Mukherjee, chief investment officer of TIAA Wealth Management.
High interest rates have weighed on certain sectors of the economy, particularly manufacturing. A separate report released Thursday showed More and more American workers are filing for unemployment Last week, profits exceeded those expected by economists, although the number remains small compared to history.
The hope on Wall Street is that growth in the labor market and economy continues to slow to reduce inflationary pressure, but not so much as to create a deep recession.
Companies whose earnings are most closely tied to the strength of the economy lagged the market Thursday following the release of the reports, such as oil and gas producers and industrial companies.
Dave & Busters Entertainment fell 10.9% after reporting larger-than-expected declines in profit and revenue for the latest quarter, citing a complex macroeconomic environment among other reasons.
Other companies have recently detailed a breakdown among their customers, where low-income households are in difficulty to cope with persistently high inflation.
Some companies have been able to soar despite pressures on the economy from a continued frenzy around artificial intelligence technology.
Broadcom jumped 12.3% after the semiconductor company reported higher profit than analysts expected for the latest quarter, helped once again by demand for AI. It also raised its revenue forecast this year.
Tesla rose 2.9% after CEO Elon Musk said early voting results indicated shareholders were leaning toward approve your salary package. Without it, Musk had threatened to hand over AI research to one of his other companies.
On the bond market, the yield on 10-year Treasury bills fell to 4.24% from 4.32% on Wednesday evening and 4.60% at the end of last month. The two-year yield, which moves more in line with Fed expectations, fell to 4.69% from 4.76%.
Most Fed officials are considering one or two interest rate cuts this year, and traders are hoping that could start as early as September.
In other trading, benchmark U.S. crude lost 44 cents to $78.18 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, lost 36 cents to $82.39 a barrel.
The US dollar fell from 157.02 Japanese yen to 157.82 Japanese yen. The euro costs $1.0742, little difference from $1.0739.
AP Business Editor Stan Choe contributed.
