Asian equities posted modest gains on Friday and capped the strongest week since early November, bolstered by continued signs of flexibility from the US Federal Reserve and optimism over US-China trade negotiations.
Shares in Tokyo led the region, with more muted gains in South Korea and Hong Kong.
Fed Chairman Jerome Powell underscored the message of patience with further interest-rate hikes, while saying the US central bank would keep shrinking its balance sheet to a more normal level.
Equities are rallying around the world as signs of progress between the world’s two biggest economies and dovish commentary from the Fed help lift sentiment that took a battering late last year.
Chinese Vice Premier Liu He (劉鶴) is set to visit Washington on Jan. 30 and 31 for further trade talks.
Still, worries remain about economic growth and earnings prospects. There is also uncertainty as the US partial government shutdown threatens to extend into a fourth week.
“Markets are ultimately waiting to see if Fed’s new rhetoric related to stepping back, does it translate to action, and does the Fed actually pause at some point,” Dan Skelly, head of equity model portfolio solutions at Morgan Stanley, told Bloomberg TV in New York.
“That’s really what we are waiting for to see a sustained move higher” in stocks, he said.
The weighted index on the Taiwan Stock Exchange on Friday ended up 38.71 points, or 0.40 percent, at 9,759.40. The TAIEX rose 4 percent this week.
The MSCI Asia-Pacific Index advanced 0.4 percent on Friday to 151.55, up 4 percent for the week.
Japan’s TOPIX on Friday rose 0.5 percent and Nikkei closed up 0.97 percent.
South Korea’s KOSPI added 0.6 percent.
Shares in Hong Kong ended higher on Friday. At the close of trade, the Hang Seng index was 0.55 percent higher at 26,667.27 points. The Hang Seng China Enterprises index rose 0.58 percent to 10,454.95.
However, Investor concern over China’s growth is likely to continue as the country plans to set a lower economic growth target of 6 to 6.5 percent this year, compared with last year’s target of “about” 6.5 percent, sources told Reuters.
The sub-index of the Hang Seng tracking energy shares rose 0.7 percent, while the IT sector rose 0.9 percent, the financial sector gained 0.55 percent and the property sector rose 1.27 percent.
The top gainer on the Hang Seng was AAC Technologies Holdings Inc (瑞聲), which gained 5.11 percent, while the biggest loser was Sino Biopharmaceutical Ltd (中國生物製藥), which fell 3.88 percent.
China’s main Shanghai Composite index closed up 0.74 percent at 2,553.83 points, while the blue-chip CSI300 index ended up 0.72 percent.
Additional reporting by CNA and Reuters
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