Asia Markets: Asian markets rise after Powell expresses confidence in recovery

Asia Markets

Nikkei up after data shows Japan slipped into recession in Q1

Pedestrians are reflected in a store window at the Sun Mall Ichibangai Arcade in Sendai, Japan.

Bloomberg News

Asian markets advanced in early trading Monday, as U.S. stock futures gained after comments from Fed chief Jerome Powell and crude oil prices rose toward a two-month high.

Japan’s Nikkei

gained 0.7% and Hong Kong’s Hang Seng Index

edged up 0.5%. The Shanghai Composite

rose 0.4% while the smaller-cap Shenzhen Composite

inched up 0.1%. South Korea’s Kospi

advanced 0.7% and Australia’s S&P/ASX 200

gained 1.4%. Benchmark indexes in Taiwan

, Singapore

and Indonesia

were mixed.

Data showed Monday that Japan sank into recession in the first quarter of 2020, and that the current quarter is expected to be worse. Japan’s economy shrank 3.4% year-over-year in the January-March period, according to the Wall Street Journal, after a 7.3% decline in the previous quarter due to a sales-tax increase. While that was not as bad as the 4.8% pullback expected by economists, the second quarter is expected to shrink by 20% or more, due to the coronavirus state of emergency imposed in April.

Japanese conglomerate SoftBank Group Corp.

said Alibaba co-founder Jack Ma has resigned from its board of directors, and announced the approval of $4.7 billion in stock buybacks.

U.S. Federal Reserve Chairman Jerome Powell told “60 Minutes” on Sunday that the central bank has plenty of ammunition to fight the recession caused by coronavirus-related shutdowns, though he predicted tough times ahead, with the economy contracting more than 30% in the second quarter and unemployment hitting up to 25%.

But Powell said he expects a relatively quick rebound. “You wouldn’t want to bet against the American economy,” he said, noting that a recovery could stretch through next year.

Stock index futures climbed Sunday night, with Dow Jones Industrial Average futures

up nearly 300 points following Powell’s interview.

On Friday, the Dow

rose 61 points, or less than 0.3%, to 23,685.42, while the S&P 500

added 11.20 points, or 0.4%, higher to end the session at 2,863.70. The Nasdaq Composite Index

closed at 9,014.56 after gaining 70.84 points, or 0.8%. Still, all three indexes finished the week lower, with the Dow down 2.7%, the S&P 500 losing 2.3% and the Nasdaq 1.2% lower.

Late Sunday, U.S. crude oil prices continued rising toward a two-month high as the global balance of supply and demand starts to right itself. After rising about 19% last week, West Texas Intermediate crude for June delivery

was last above $30 a barrel. July Brent crude

, the global benchmark, gained more than 3%.

The dollar

gained to 107.12 yen from Friday’s 107.08 yen.

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