Asian shares mostly rise in muted trading on bargain-hunting

TOKYO (AP) — Asian shares were mostly higher Friday after Wall Street benchmarks fell on worries that the U.S. Federal Reserve will keep raising interest rates.

Markets rose in Japan, Australia, South Korea and China in muted trading. Oil prices rose.

Hot readings on the U.S. jobs market Thursday got traders thinking the Fed will need to keep inflicting pain on the economy to fight surging prices. Inflation has been easing from a peak of 9.1% in June to 7.1% in November and investors have been hoping for signs that could prompt the Fed to ease up on applying the brakes to the economy with high interest rates. Those hopes have been dashed so far.

The strong labor market reports set the stage for the release on Friday of the Labor Department’s snapshot of hiring in December.

“Overall risk sentiments could lean more toward a wait-and-see in the lead-up to the U.S. job report later, lacking a clear conviction in market direction from Wall Street over the past few days,” Yeap Jun Rong, market analyst at IG, said in a report.

Japan's benchmark Nikkei 225 rose 0.6% to finish at 25,973.85. Australia's S&P/ASX 200 added 0.7% to 7,109.60. South Korea's Kospi gained 1.1% to 2,289.78. Hong Kong's Hang Seng erased earlier gains, edging 0.1% lower to 21,024.36. The Shanghai Composite rose 0.1% to 3,159.72.

Analysts expect economic growth in Asia to slow this year, although China's easing of COVID-19 restrictions is expected to be a plus. Suktae Oh, an analysts at Societe Generale, expects the Bank of Korea to raise rates by 25 percentage points to 3.50% at its policy meeting next week.

“The data continue to indicate weak economic activity and peaking inflation. The concerns surrounding financial stability have persisted due to high corporate leverage and housing market...