Asian markets mostly rise, as weak yen boosts Japan’s Nikkei

Japan’s benchmark Nikkei 225
NIK,
+1.02%
rose 1% in morning trading. Australia’s S&P/ASX 200
XJO,
+0.95%
gained nearly 1% and South Korea’s Kospi
180721,
+0.23%
edged up nearly 0.2%. Hong Kong’s Hang Seng
HSI,
+1.02%
rose 1%, while the Shanghai Composite
SHCOMP,
+0.20%
added 0.2%. Benchmark indexes in Taiwan
Y9999,
-0.34%,
Malaysia
FBMKLCI,
+0.07%
and Indonesia
JAKIDX,
-0.51%
fell, while stocks rose in Singapore
STI,
+0.29%.

Shares of Fast Retailing Co.
9983,
+1.13%,
which operates the popular Japanese Uniqlo clothing retailer, rose 1.4% in morning trading after the company announced that it was raising the salaries of its workers by up to 40%.

The move is aimed at “greatly strengthening its investment in personnel, remunerating each and every employee appropriately for their ambition and talents, as well as increasing the company’s growth potential and competitiveness in line with global standards,” the company said in a statement.

On Wall Street, the S&P 500
SPX,
+0.70%
rose 0.7% to 3,919.25 after drifting between small gains and losses through the day. The Dow Jones Industrial Average
DJIA,
+0.56%
gained 0.6% to 33,704.10, and the Nasdaq composite
COMP,
+1.01%
climbed 1% to 10,742.63.

The stock market has had a positive start to 2023 helped by hopes that cooling inflation and a slowing economy may convince the Federal Reserve to ease off its markets-shaking hikes to interest rates. The Fed since early last year has been raising rates at a furious pace to bring painful inflation under control. Such moves risk causing a recession and hurt investment prices.

Investors were hoping for some clues about where the Fed is heading from its chair, Jerome Powell, who spoke at a forum in Stockholm on Tuesday. But he gave little news about rates.

The next big event for markets is likely Thursday’s update on December U.S. inflation at the consumer level. Economists expect it to show price gains slowed further, to 6.5% from 7.1% in November and from a peak of more than 9% in the summer.

A worse-than-expected reading could dash the building hopes on Wall Street that the Fed may stop its hikes soon and perhaps even cut rates by the end of the year. Some investors see the economy successfully walking the tightrope of slowing enough to snuff out high inflation but not so much as to cause a painful recession.

Past rate increases and high inflation have already hurt economic activity around the world, and the Fed has pledged to keep rates high for a while to ensure the job is done on inflation. It doesn’t envision any rate cuts until 2024.

The World Bank said Tuesday the global economy will come “perilously close” to a recession this year in its annual report.

It usually takes a while for rate hikes to be fully felt in the economy. That could push a recession off to the second half of the year, said Barry Bannister, chief equity strategist at Stifel. The global economy could also benefit from strengthening in China, as it removes restrictions meant to keep COVID-19 at bay but that also hurt its economy.

“You’re looking at a pretty good six months where things get better at the margins and then trouble starts to rear its head,” Bannister said.

In the meantime, big U.S. companies will begin showing investors later this week how much profit they made during the last three months of 2022. Hot inflation has been squeezing customers’ wallets and raising costs for businesses, threatening their earnings.

In energy trading, benchmark U.S. crude
CLG23,
-1.00%
sank 65 cents to $74.47 a barrel in electronic trading on the New York Mercantile Exchange. It gained 49 cents to $75.12 a barrel on Tuesday. Brent crude
BRNH23,
-0.91%,
the international standard, lost 65 cents to $79.45 a barrel.

In currency trading, the U.S. dollar
USDJPY,
+0.08%
rose to 132.52 Japanese yen from 132.13 yen.