Japan’s Nikkei 225 rises 1% after data shows economy shrank less than expected in first quarter

SINGAPORE — Shares in Asia-Pacific rose on Wednesday morning as investors watch the market’s reaction to comments by U.S. Federal Reserve Chairman Jerome Powell on his determination to hike rates until inflation subsides .

Japan’s Nikkei 225 gained about 1% as shares of conglomerate SoftBank Group jumped 2.77%. The Topix index was trading up 0.86%.

Japan’s economy shrank 1% on an annualized basis in January-March from the previous quarter, government data showed Wednesday. That was less than the 1.8% contraction predicted in one poll, according to Reuters.

The South Korean Kospi rose 0.82%. Australian stocks also posted gains as the S&P/ASX 200 climbed 0.64%.

MSCI’s broadest Asia Pacific ex-Japan equity index traded up 0.44%.

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US Fed Chairman Jerome Powell said he would support interest rate hikes until prices start to fall back to a healthy level. Earlier in May, the US central bank raised rates by half a percentage point – its biggest hike in two decades – as it seeks to tackle inflation.

Overnight on Wall Street, the S&P 500 jumped 2.02% to 4,088.85 while the tech-heavy Nasdaq Composite jumped 2.76% to 11,984.52. The Dow Jones Industrial Average gained 431.17 points, or 1.34%, to 32,654.59.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 103.323 after falling recently from levels above 104.

The Japanese yen was trading at 129.39 to the dollar, after holding above the 129 level against the greenback for much of the week so far. The Aussie dollar changed hands at $0.7031, above levels below $0.70 seen earlier in the week.

Oil prices were higher in morning trading hours in Asia, with international benchmark Brent futures up 1.14% at $113.21 a barrel. U.S. crude futures climbed 1.46% to $114.04 a barrel.

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