Other than Nikkei-225, Asian stock markets fell on Friday as Thursday's US economic data increased the market uncertainty. Simultaneously, the Nikkei-225 rallied in Japan; the next BoJ governor vowed to maintain the ultra-dovish policies. Kazuo Ueda said he broadly supports holding interest rates at ultra-low levels in the near term. However, today's published data shows that inflation in Japan at 4.2% reached a 41-year high, and it finally can push the central bank to change its policies.
On the data front, before looking at the day ahead, it will be better to review yesterday's published numbers. According to the US department of labor, in the week ended February 18, US initial Jobless claims fell to the lowest level in three weeks, with 192,000 applying. It was less than 200K market expectations and 194K the week ago. It remains even much lower than the pre-pandemic average of about 220K. The number of continuing claims for unemployment benefits was recorded at 1.654 million, missing market expectations of 1.700 million but higher than the previous week of 1.691 million (1.696 million before revision).
In addition, the US Q4 2022 GDP raised by 2.7%, which was lower than market expectations and the previous value of 2.9%. The data showed that goods contracted for the fourth straight quarter, while growth momentum in the services sector slowed. Also, consumer spending slowed sharply, with an annual growth rate of 1.4%. Elsewhere, non-residential construction investment was solid elsewhere, offsetting the declines in residential and business equipment.
Data released on Friday's EU session showed that UK consumer confidence rebounded in February, with the GfK's consumer confidence index climbing to minus 38, up from minus 31. In Germany, the GfK consumer climate index also advanced to -30.5 in March, up from -33.8 the previous month. In addition, the Eurozone's largest economy contracted 0.4% in Q4 2022 to ease the annual growth to 0.3%.
With mentioned data, we can still be less pessimistic than a few months ago about 2023's economic growth. This is what OECD Secretary-General Mathias Cormann said Friday in an interview on CNBC: "The outlook for the world is slightly brighter at the beginning of 2023 than what we thought it would be just two or three months ago,"
As a reaction, Nikkei 225 gained 1.3% in Asia, and Hangens and Shangai lost 1.7% and 0.6%, respectively. However, we saw a positive reaction to the data mentioned in the European season. The US FTSE 100 gained 0.3%, the German DAX is up by 0.1%, and France's CAC 40 is up by 0.3%.