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 NIK, +0.52% gained 0.7% and Hong Kong’s Hang Seng Index HSI, +0.39% edged up 0.5%. The Shanghai Composite SHCOMP, +0.60% rose 0.4% while the smaller-cap Shenzhen Composite 399106, +0.24% inched up 0.1%. South Korea’s Kospi 180721, +0.68% advanced 0.7% and Australia’s S&P/ASX 200 XJO, +1.17% gained 1.4%. Benchmark indexes in Taiwan Y9999, -0.22% , Singapore STI, +0.73% and Indonesia JAKIDX, +0.06% 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.
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.
On Friday, the Dow DJIA, +0.25% rose 61 points, or less than 0.3%, to 23,685.42, while the S&P 500 SPX, +0.39% added 11.20 points, or 0.4%, higher to end the session at 2,863.70. The Nasdaq Composite Index COMP, +0.79% 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 CLM20, +3.73% was last above $30 a barrel. July Brent crude BRNN20, +2.89% , the global benchmark, gained more than 3%.
The dollar USDJPY, +0.04% gained to 107.12 yen from Friday’s 107.08 yen.