Asian equities headed for a third weekly gain, helped along by expectations of more stimulus from China. The yen weakened as the Bank of Japan held its easy policy settings.
(Bloomberg) — Asian equities headed for a third weekly gain, helped along by expectations of more stimulus from China. The yen weakened as the Bank of Japan held its easy policy settings.
Benchmarks in China, Australia and South Korea rose Friday. An advance for Hong Kong’s Hang Seng Index placed the gauge on pace for its second week of gains in excess of 2%, as worries about Chinese growth morph into hopes for further policy support.
Japanese shares edged into positive territory to reverse morning losses after the Bank of Japan kept is negative rate and yield curve control program unchanged.
“The decision should not have been a surprise,” said John Vail, chief global strategist at Nikko Asset Management. “Anyone who shorts the yen versus the dollar must realize that the authorities will likely intervene with little warning if it gets much weaker.”
Underscoring the broadly positive sentiment in stocks, the S&P 500 rose for a sixth day on Thursday — its longest winning run since November 2021. The Nasdaq 100 hit the highest since March 2022, helped along by exuberance surrounding artificial intelligence that has also raised concerns about an overbought market.
Bets that the Federal Reserve will soon end its tightening cycle also boosted risk sentiment.
The wins for the Asia gauge has it poised for the best run of weekly advances since January, when excitement over China’s reopening lifted stocks across the region. US futures were slightly lower while European contracts edged higher.
The dollar rose slightly after slumping Thursday while the euro held most of a rally after the European Central Bank lifted interest rates by another quarter-point, with President Christine Lagarde describing a further hike in July as “very likely.”
“The euro area has more of an inflation problem than the US and therefore the ECB will continue to hike, at least to 4%,” Christian Kopf, head of fixed income and FX for Union Investment Privatfonds GmbH said in an interview with Bloomberg Television.
Australia’s yield curve reversed its Thursday inversion, the first since 2008, as three-year yields fell and 10-year yields rose slightly. New Zealand yields declined after a rally in Treasuries on Thursday when the 10-year Treasury yield declined seven basis points to 3.72%. Treasury yields inched higher Friday.
Elsewhere, oil edged higher and gold was little changed after a rally in commodity prices Thursday pushed the Bloomberg Commodity Index to its biggest advance since November. Bitcoin fell slightly to trade at around $25,500.
Wall Street’s fervor will face a big test on Friday with the expiration of a massive amount of options contracts tied to stocks and indexes. The event, known as OpEx, typically obliges traders to either roll over existing positions or start new ones. That usually involves portfolio adjustments that lead to a spike in volume and sudden price swings.
Key events this week:
- US University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were down 0.1% as of 7:03 a.m. London time. The S&P 500 rose 1.2%
- Nasdaq 100 futures fell 0.1%. The Nasdaq 100 rose 1.2%
- Japan’s Topix rose 0.3%
- Australia’s S&P/ASX 200 rose 1.1%
- Hong Kong’s Hang Seng rose 1.5%
- The Shanghai Composite rose 0.6%
- Euro Stoxx 50 futures rose 0.1%
- The Australian dollar was little changed
- The British pound was little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0943
- The Japanese yen fell 0.3% to 140.69 per dollar
- The offshore yuan fell 0.1% to 7.1280 per dollar
Cryptocurrencies
- Bitcoin fell 0.1% to $25,517.01
- Ether was little changed at $1,670.42
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.73%
- Japan’s 10-year yield declined 1.5 basis points to 0.405%
- Australia’s 10-year yield was little changed at 4.01%
Commodities
- West Texas Intermediate crude was little changed
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Rita Nazareth.
More stories like this are available on bloomberg.com
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