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Investing.com – Asia Pacific stocks were up on Friday morning, clawing back losses from Thursday’s tech selloff. Investors now await the latest U.S. jobs report and digesting a bigger-than-expected contraction in Japanese household spending.
Japan’s Nikkei 225 fell 0.62% by 9:08 PM ET (2:08 AM GMT). Data released earlier in the day showed that household spending contracted 1.3% and 1.2% year-on-year and month-on-month in November, while the Tokyo core consumer price index (CPI) grew 0.5% year-on-year in December.
South Korea’s KOSPI rose 0.93% and in Australia, the ASX 200 jumped 1.20%.
Hong Kong’s Hang Seng Index gained 0.43%.
China’s Shanghai Composite was up 0.30% while the Shenzhen Component was up 0.42%.
The hawkish stance taken by the U.S. Federal Reserve, evidenced in its December meeting, roiled markets in the first few days of 2022. It has also led investors to reassess how to price assets as central banks tighten their monetary policies, a move not seen in at least three years.
“We knew coming into 2022 that the Fed was going to be a creator of volatility within the market and we’re seeing that right out of the gate at the start of the year,” Ally chief markets and money strategist Lindsey Bell told Bloomberg.
“The good news is that today things seem to be stabilizing a little bit after yesterday’s knee-jerk reaction.”
Comments by regional Fed presidents on Thursday provided some additional insight into a possible schedule for tightening policy. St. Louis Fed President James Bullard said in a speech the U.S. central bank could raise its target interest rate as soon as March 2022, while San Francisco Fed President Mary Daly said at a separate event that trimming the Fed balance sheet would come after normalizing the Fed funds rate.
Meanwhile, European Central Bank executive board member Isabel Schnabel will speak at a panel on Saturday.
DataTrek Research co-founder Nicholas Colas urged investors to tread “very carefully” the next few days.
“Markets are concerned that we’ve never seen the Federal Reserve both lift interest rates off zero and reduce the size of its balance sheet at the same time. We’re not predicting a meltdown, but we get why the market swooned.”
On the data front, the number of initial jobless claims rose to 207,000 for the previous week. Investors now await the U.S. jobs report, including non-farm payrolls, due later in the day.
