Asian shares experienced a rebound on Friday, driven by a surge in global chipmakers’ stocks. At the same time, the Japanese yen faced significant losses as investors scaled back expectations of an imminent shift in the Bank of Japan’s (BOJ) accommodative monetary policies.
MSCI’s broadest index of Asia-Pacific shares outside Japan rallied 1.0% on Friday, although it remained down 2.7% for the week, influenced by concerns about the outlook of the global interest rate.
Japan’s Nikkei rose by 1.3%, inching close to a 34-year high reached earlier in the week. However, data revealing a second consecutive monthly slowdown in Japan’s core consumer inflation in December added to speculation that the BOJ may not hastily tighten its ultra-loose monetary policy. The Japanese yen depreciated by 0.2% against the dollar, marking a nearly 2.5% decline for the week and reaching its lowest since early December.
Taiwan Semiconductor Manufacturing (TSMC) shares listed in Taipei surged by 6.3% after the chip giant projected a more than 20% growth in revenue for 2024. Its U.S. shares experienced a nearly 10% surge overnight, contributing to a widespread tech rally on Wall Street.
In China, stocks slipped after bouncing from five-year lows as signs of state support emerged. Chinese blue chips fell by 0.3%, while Hong Kong’s Hang Seng index eased by 0.2%.
Treasuries remained steady in Asia but faced substantial weekly losses. The 10-year yield rose 2 basis points to 4.1593%, up 21 basis points for the week.
The positive momentum in Asian markets is expected to spill into European trading, with EURO STOXX 50 futures up by 0.4%. Nasdaq 100 futures, known for its tech-heavy composition, rose by 0.3%, following a record high in the previous session.
U.S. weekly jobless claims unexpectedly dropped, signaling economic resilience, which tempered expectations of the Federal Reserve’s March interest rate cut. While markets still leaned towards a March rate cut, the probability decreased to 55%, down from 70% the previous week. The U.S. dollar index showed a 0.9% gain for the week as central bank officials pushed back against aggressive easing expectations.
Oil prices were volatile due to increasing geopolitical risks in the Middle East. U.S. crude futures remained flat at $74.12 per barrel, and Brent futures were at $78.99, down 0.1% on the day. Spot gold eased 0.1% to $2,020.69 an ounce.
