Asian Stocks Climb as Investors Find Comfort in Tech Rally on Wall Street Last Week

Asian shares were trading higher on Monday as optimism over the rally on Wall Street carried over into the new week. Sydney’s S&P/ASX 200 rose by 0.6%, South Korea’s Kospi surged nearly 1.0%, Hong Kong’s Hang Seng jumped 1.2%, and the Shanghai Composite increased by 0.6%.

However, trading was closed in Tokyo due to a Japanese national holiday, Showa Day, marking the beginning of the Golden Week holidays in Japan.

Stephen Innes, managing partner at SPI Asset Management, noted that the market mood was positive following last week’s tech-driven rally on Wall Street. Strong earnings reports have boosted market sentiment, but concerns remain about the declining Japanese yen.

The yen reached a new 34-year low after the Bank of Japan decided to keep interest rates unchanged, causing the U.S. dollar to edge up to 159.17 Japanese yen. A weak yen can benefit Japan’s exporters but may hurt the economy in the long run.

On Wall Street, the S&P 500 closed out its first winning week in the last four, rallying 1%. The Dow Jones Industrial Average rose by 0.4%, and the Nasdaq composite jumped 2%.

Analysts expect the Federal Reserve to keep interest rates on hold at its upcoming policy meeting, as recent data on U.S. inflation remain high. Treasury yields eased in the bond market following the inflation report.

In energy trading, benchmark U.S. crude fell to $83.05 a barrel, while Brent crude lost ground to $88.59 a barrel. Investors will be closely watching the Fed’s policy meeting later this week for further guidance on interest rates and inflation.