Asian stocks climbed on Thursday as they followed the upward movement of Wall Street. South Korea’s Kospi index experienced a notable jump, increasing by over 6%. Pieces of good news came for U.S. markets too, as futures edged higher following an announcement from the U.S. Treasury Department. The department revealed plans to at least double its purchases of longer-term government debt. This move is likely to elevate bond prices, thereby reducing yields and relieving pressure on stock prices emerging from the bond market.
The Kospi rose by 6.1% to reach 6,858.91, rebounding from a 5.8% fall on Wednesday, which was driven by renewed selling in shares related to artificial intelligence. Samsung Electronics saw a 9.7% increase, while SK Hynix, a memory chipmaker, surged 14.1% after unveiling a substantial share buyback plan.
Japan’s Nikkei 225 grew by 1.3% to 66,178.26, reversing earlier weekly losses. Despite Japan reporting a trade deficit for the third month in July due to record highs in imports and exports, shares of OpenAI investor SoftBank Group, a Japanese multinational firm, advanced by 3.8%.
Hong Kong’s Hang Seng Index gained 1.1%, reaching 25,786.32, while the Shanghai Composite Index increased by 0.3% to 3,905.23. In Australia, the S&P/ASX 200 had a modest rise of 0.3%, ending at 9,066.40. Taiwan’s Taiex remained almost unchanged, and India’s Sensex rose 0.7%.
Following the U.S. Treasury’s announcement on expanded plans for government debt buybacks, U.S. bond yields decreased. Generally, bond yields fall when bond prices escalate. This development seemed to pacify investors who were anxious about increasing yields. On Wednesday, the S&P 500 rose by 0.2%, marking its first gain after four days. The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite also increased by 0.2% each.
U.S. bond yields had climbed over recent months due to growing inflation concerns linked to the ongoing conflict in Iran and swelling government debt. The yield on the 10-year U.S. Treasury fell to approximately 4.64% from 4.71% on Tuesday, though it remains much higher than pre-war levels. The 30-year Treasury yield decreased from 5.28% on Tuesday to 5.18% on Thursday. Bond yields in Asia also eased following the U.S. Treasury’s announcement. Japan’s 10-year government bond yield dropped to around 2.83% from over 2.89% on Wednesday, close to 30-year highs.
Oil prices edged up slightly on Thursday as U.S.-Iran negotiations over the war showed little advancement. Brent crude, the global benchmark, climbed 0.3% to $91.90 per barrel, with its price standing around $72 per barrel before the conflict. U.S. benchmark crude increased by 0.2% to $84.57 per barrel.
The U.S. dollar rose against the Japanese yen, reaching 158.60 yen from 158.16 yen. Conversely, the euro dropped slightly, trading at $1.1676 compared to $1.1677.
Additional contributions made by AP Business Writer Stan Choe.
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