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

SINGAPORE — Shares in Asia-Pacific rose in Wednesday morning trade as investors watch for market reaction to comments from U.S. Federal Reserve Chairman Jerome Powell on his resolve to raise rates till inflation comes down.

The Nikkei 225 in Japan gained about 1% as shares of conglomerate SoftBank Group jumped 2.77%. The Topix index traded 0.86% higher.

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

South Korea’s Kospi rose 0.82%. Australian stocks also saw gains as the S&P/ASX 200 climbed 0.64%.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.44% higher.

U.S. Fed Chair Jerome Powell said he will back interest rate increases till prices begin falling back toward a healthy level. Earlier in May, the U.S. central bank raised rates by half a percentage point —its largest hike in two decades — as it looks to fight inflation.

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

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