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Investing.com – Asia Pacific stocks were up on Monday morning after Wall Street rebounded strongly at the end of last week despite fears of prolonged inflation and a recession caused by monetary tightening.
Japan’s Nikkei 225 gained 1.40% by 10:37 PM ET (2:37 AM GMT).
South Korea’s KOSPI jumped 2.00%.
In Australia, the ASX 200 rose 1.91%.
Hong Kong’s Hang Seng climbed 2.69%.
China’s Shanghai Composite was up 1.11% while the Shenzhen Component was up 0.69%.
On Friday, the S&P 500 surged more than 3%.
Yields have retreated from June highs, leaving the U.S. 10-year Treasury yield at 3.13%.
The Group of Seven leaders plan to offer indefinite support to Ukraine for its defense against Russia’s invasion. The US, UK, Japan, and Canada also plan to announce a ban on new gold imports from Russia during the G-7 summit.
Investors are still concerned about the lasting price pressure and tighter policy.
“The market remains focused on the trade-off between the policy response to high inflation and fears of a hard landing,” Westpac rates strategist Damien McColough said in a note.
“There will be ongoing discussions as to whether long-end yields have peaked, however, we would not yet expect 10-year yields to fall materially or sustainably below 3%.”
Investors are also looking to see if the highest inflation in a generation has reached the cresting.
“There’s a feeling that things aren’t as bad as we thought they were going to be,” Pepper International founder Carol Pepper told Bloomberg. Pepper added, “there’s a hope that perhaps we’ve oversold, perhaps there’s not going to be a recession.”
U.S. Federal Reserve Bank of San Francisco President Mary Daly said on Friday that she supports another 75 basis-point interest rate hike in July while Fed Bank of St. Louis President James Bullard said fears of a U.S. recession are overblown.
In Asia Pacific, China’s purchasing managers index is due on Thursday.
