Asian Shares Mixed After Yellen’s Comments

Asian stocks ended Friday’s session on a mixed note as investors digested upbeat U.S. data and reacted to reports that the world’s largest economy will reveal a budget that would increase federal spending to $6 trillion in the coming fiscal year.

The dollar firmed up and Treasury yields ticked higher after U.S. Treasury Secretary Janet Yellen said above-normal inflation is likely to persist through the end of the year before fading.

Chinese shares fell slightly amid a strong yuan and lingering worries about policy tightening. Sino-U.S. relations remained on investors’ radar after the U.S. Senate advanced a sweeping package of legislation intended to boost the country’s ability to compete with Chinese technology.

Meanwhile, a statement from the Chinese Commerce Ministry described the virtual meeting between the U.S. and China’s top trade speakers as “candid, pragmatic and constructive” but did not reveal if the discussions included rolling back Trump-era tariffs.

China’s Shanghai Composite index dipped 8.07 points, or 0.22 percent, to 3,600.78 while Hong Kong’s Hang Seng index ended marginally higher at 29,124.41.

Japanese shares rallied amid hopes that a steady vaccination drive can help accelerate economic recovery. With infections not yet slowing to levels it can safely host the Olympics opening, the government is set to extend the COVID-19 state of emergency covering Tokyo and eight other prefectures for three weeks until June 20.

The Nikkei average jumped 600.40 points, or 2.10 percent, to 29,149.41, closing above the 29,000 level for the first time since May 10. The broader Topix index closed 1.91 percent higher at 1,947.44.

Market heavyweight SoftBank Group rallied 3.7 percent and Uniqlo operator Fast Retailing climbed 2.1 percent. Automaker Honda Motor jumped 3.6 percent, Nissan Motor added 3.1 percent and Toyota Motor advanced 1.7 percent as the dollar remained solid in the upper 109 yen range after rising overnight on optimism about the U.S. economic recovery.

Railway-related stocks rose, with Central Japan Railway gaining 2.5 percent and East Japan Railway adding 2 percent.

In economic news, the unemployment rate in Japan came in at a seasonally adjusted 2.8 percent in April – beating expectations for 2.7 percent and up from 2.6 percent in March.

Overall consumer prices in Tokyo were down 0.4 percent year-on-year in May – following the 0.6 percent decline in April. Core CPI was down an annual 0.2 percent – unchanged and in line with expectations.

Australian markets advanced, with miners leading the charge as iron ore prices rebounded from over six-week lows, aided by strong U.S. economic data released overnight.

The benchmark S&P/ASX 200 index climbed 84.60 points, or 1.19 percent, to 7,179.50 even as Victoria entered a seven-day lockdown over concerns about a highly infectious variant of COVID-19. The broader All Ordinaries index ended up 80 points, or 1.09 percent, at 7,424.

Mining heavyweights BHP and Rio Tinto jumped 2.9 percent and 2.6 percent, respectively. Woodside Petroleum, Oil Search and Santos gained around 2 percent after oil prices rose about 1 percent overnight.

Shareholder registry firm Link Administration soared 5 percent after private equity giant KKR & Co made an offer to buy its majority-owned online real estate platform PEXA.

Seoul stocks gained ground as improved U.S economic data raised hopes for a quick economic recovery from the pandemic. The benchmark Kospi edged up 23.22 points, or 0.73 percent, to settle at 3,188.73.

Top automaker Hyundai Motor jumped as much as 5.2 percent and leading chemical firm LG Chem added 3.6 percent.

New Zealand shares fell as a rise in bond yields prompted selling in recent outperformers. The benchmark NZX-50 index dropped 61.09 points, or half a percent, to 12,182.25. Mercury NZ led losses to end the session 5.8 percent lower.

U.S. stocks ended mostly higher overnight as jobless claims fell to a new pandemic low in another sign of economic reopening, and GDP growth in Q1 came in unrevised at 6.4 percent in the second estimate.

The Dow rose 0.4 percent and the S&P 500 inched up 0.1 percent while the tech-heavy Nasdaq Composite finished marginally lower.

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