The Asian stock market rose on Friday fueled by positive news over the Federal Reserve Monetary Policy and better U.S. economic data. Buying increased across all the stocks of Japan and South East Asian Equities.


Volatile Nikkei

Japan’s Nikkei increased 1.9 percent on average after it declined 6.4 percent the other day. At the close on Thursday the Nikkei was 20.4 percent down on an average from its highest on May 23.

Nikkei closed up 241.14 points at 12,686.52 after trading as high as 12,900.65. For the week, the exchange was down 1.5 percent, which is the fourth consecutive weekly loss. Yesterday’s decline of 6.4 percent was the lowest close since April 3.

Nikkei has been extremely volatile over the past three weeks. The 30-day implied volatility for Nikkei rose 42.3 percent on Thursday, the biggest since the March 2011 earthquake and tsunami.

Factors Contributing to the Rebound

The stocks rebounded fueled by the shares on Wall Street that gained after declining for continuous three days. The Wall Street Journal, further, released the news that the Federal Reserve will in its next policy meeting address mounting concerns over the increase of short-term interest rates in the near future—this also helped a bit.

The data, which reflected U.S. retail sales and new jobless claims, was also positive, which further helped the stock markets to increase.

Matthew Sherwood, head of investment market research at Sydney-based Perpetual, said, “We are stuck in a ‘Goldilocks world’ as the continued see-sawing between concerns about market-related policy and the real U.S. economy [are] likely to persist for the remainder of the year.”

Banking Stocks Trend Down

Banking stocks witnessed a decline, with megabanks losing 0.7 percent while regional banks were down 4.5 percent. For the full week, megabanks lost 0.7 percent; all of the major banks are down 0.5 percent while regional banks lost 4.5 percent. The decline in major banks was almost similar to the pace experienced by Nikkei 225 Average while regional banks witnessed a relatively sharp fall, says a report from Barclays.

Many of the Japanese exporters gained despite strong yen. Mazda Motor Corporation (TYO:7261) was up 1.7 percent and Casio Computer Co. gained 2.5 percent.

Other Asian Markets

Thailand’s SET was up 3.5 percent, and Indonesia’s JSX jumped 3.3 percent in the afternoon trade. Philippine benchmark PSEI gained 2.1 percent after declining 6.7 percent yesterday. SET was down 2.1 percent while JSX fell 1.9 percent yesterday.

Hong Kong’s Hang Seng Index was up 0.4 percent and Shanghai Composite gained 0.6 percent. Australia’s S&P/ASX 200 was up 2 percent while South Korea’s Kospi gained 0.4 percent.