Asian Stocks Rise Following Wall Street, Yen Gains: Markets Wrap

(Bloomberg) — Asian equities advanced Thursday after stocks and bonds rose on Wall Street in a week marred by tariffs, lackluster tech earnings and uneven US economic data. The yen strengthened to the highest level since early December.

Shares in Australia, Japan and South Korea rose, while stocks in mainland China and Hong Kong fluctuated in opening trade. US equity futures were steady after the S&P 500 and Nasdaq 100 both notched a second day of gains on Wednesday, extending a rebound from Monday’s decline.

Treasuries were also stable in Asian trading after rallying across the curve Wednesday. The US 10-year yield dropped nine basis points to 4.42% during the session while the policy-sensitive two-year yield declined three basis points to 4.18% — both the lowest since the middle of December. Australian yields fell early Thursday.

The yen rose against the dollar for a fourth day, helped along by comments from Bank of Japan official Naoki Tamura, who said Japanese interest rates could touch 1% in the second half of the fiscal year 2025. The Japanese currency also faces fresh demand from hedge funds amid volatile trading in currency markets.

The steady gains for stocks and bonds reflect a sense of calm across global markets after gyrations earlier in the week as Donald Trump began to impose elements of his tariff plan. Now, the focus is shifting to Friday’s US jobs numbers and the effect on Federal Reserve policy.

“Volatility has been the story this week, with the stock market trying to find its footing as it navigates a shifting tariff landscape and mixed earnings,” said Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team. 

Lower yields weighed on the dollar. An index of greenback strength fell 0.2% Wednesday to the lowest level in a week. 

The moves in the US overnight were partly the result of data that showed weaker-than-expected demand for services. The slowdown suggests activity may moderate in coming months as some Americans tighten their belts against a backdrop of the high cost of living.

Separate data showed employment at US companies picked up in January by more than forecast and comes ahead of Friday’s closely-watched jobs report. 

Federal Reserve officials are closely tracking developments in the jobs market as they assess how much to lower interest rates this year. A rapid pickup in the unemployment rate last summer was a key driver behind policymakers’ decision to lower rates by a full percentage point in 2024. That said, the job market has showed renewed strength since then, with Fed Chair Jerome Powell describing it last week as “pretty stable.”

Meanwhile, Treasury Secretary Scott Bessent said the Trump administration’s focus with regard to bringing down borrowing costs is 10-year Treasury yields, rather than the Federal Reserve’s benchmark short-term interest rate.

Shares in Nomura Holdings Inc. rose 8% to levels not seen since 2008 as profit rose more than analysts expected in results released Wednesday. Nissan Motor Co. rose while those in Honda Motor Co. fell following signs of doubt regarding a potential combination of the two companies.

Data set for release in Asia includes inflation for Vietnam and Thailand. In Europe, the Bank of England is expected to reduce interest rates by 25 basis points to 4.5%.

Elsewhere in Asia, China sought talks with the US at the World Trade Organization following the 10% tariffs placed on Chinese imports. In a document circulated Wednesday China said the moves by the US were “imposed on the basis of unfounded and false allegations.”

In commodities, gold was steady after touching a record high Wednesday amid concerns over tightness in the market. US oil inched higher after falling more than 2% Wednesday. Saudi Arabia increased the price of its flagship crude to Asia as the kingdom responds to surging premiums for Middle Eastern crude and improving refinery margins. 

“Uncertainty is not good when it comes to the outlook for demand,” Tamar Essner, principal for Vectis Energy Partners, said on Bloomberg Television regarding the Wednesday decline in oil prices. “Particularly in an environment when Chinese demand, the lynchpin of the demand growth story, is already under question.”

Key events this week:

• Eurozone retail sales, Thursday
• UK rate decision, Thursday
• US initial jobless claims, Thursday
• Fed’s Christopher Waller, Lorie Logan speak, Thursday
• Amazon earnings, Thursday
• US nonfarm payrolls, unemployment, University of Michigan consumer sentiment, Friday
• Fed’s Michelle Bowman, Adriana Kugler speak, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 10:49 a.m. Tokyo time
• Nikkei 225 futures (OSE) rose 0.4%
• Japan’s Topix rose 0.2%
• Australia’s S&P/ASX 200 rose 1%
• Hong Kong’s Hang Seng was little changed
• The Shanghai Composite was little changed
• Euro Stoxx 50 futures rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was unchanged at $1.0403
• The Japanese yen rose 0.4% to 151.94 per dollar
• The offshore yuan was little changed at 7.2772 per dollar

Cryptocurrencies

• Bitcoin rose 0.2% to $97,083.9
• Ether was little changed at $2,785.56

Bonds

• The yield on 10-year Treasuries was little changed at 4.42%
• Japan’s 10-year yield was little changed at 1.280%
• Australia’s 10-year yield declined six basis points to 4.29%

Commodities

• West Texas Intermediate crude rose 0.3% to $71.22 a barrel
• Spot gold was little changed

This story was produced with the assistance of Bloomberg Automation.

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