Shares in Asia rallied after robust technology earnings bolstered Wall Street. The yen weakened after the Bank of Japan kept it key rate unchanged and announced a review of its policy.
(Bloomberg) — Shares in Asia rallied after robust technology earnings bolstered Wall Street. The yen weakened after the Bank of Japan kept it key rate unchanged and announced a review of its policy.
The BOJ maintained its ultra-loose monetary policy settings in the first meeting under new governor Kazuo Ueda, keeping its 0.5% ceiling for 10-year government bond yields and leaving its short-term policy rate at minus 0.1%.
Equities in Japan, Australia, South Korea and China all advanced following the best day for the S&P 500 since the first week of the year and a 2.8% jump for the tech-heavy Nasdaq 100.
Still, those gains began to erode in early Asian trading. US futures were broadly lower after Amazon.com Inc. warned of a slowdown in revenue growth for its cloud computing business.
Treasuries stabilized in Asia after sliding on Thursday when the US economy showed a surprise increase in inflation pressure during the first quarter. The Federal Reserve is forecast to raise interest rates by a quarter percentage point when it meets next week.
In Asia, investors prepared for earnings reports from some of the largest Chinese lenders including Bank of China Ltd., China Citic Bank Corp. and Industrial & Commercial Bank of China Ltd.
Chinese banks are “macro proxy so this year, if China’s GDP is going to have a modest acceleration, bank earnings growth will probably have room for upside as well,” Winnie Wu, China equity strategist for Bank of America Securities, said in an interview with Bloomberg Television.
Thursday’s rally for US equities reflected positive corporate reports from mega-cap tech companies including Meta Platforms Inc., Alphabet Inc. and Microsoft Corp, while Intel Corp. shares advanced in post-market trading after releasing results late Thursday.
“We certainly see big tech do well in earnings but we’re also seeing quite a lot of other companies that are slowing down,” Laila Pence, president of Pence Wealth Management, said on Bloomberg Television.
The latest batch of US economic data — including a slowdown in US jobless claims — showed the kind of cognitive dissonance investors have been grappling with, said Dana Peterson, chief economist at The Conference Board.
“Typically when you have recessions, the labor market collapses with GDP, and we’re not seeing that,” Peterson said. “We’re probably going to dip into a recession, maybe starting right now in the second quarter, but we really need to see data.”
Read More: US in ‘Worst of Both Worlds’ With High Inflation, GDP Slowdown
Elsewhere, oil was little changed after wiping out all the gains from OPEC+’s surprise production cut at the beginning of the month. The dollar and gold were little changed, while Bitcoin slipped further away from the $30,000 level.
Here are some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 1:07 p.m. Tokyo time. The S&P 500 rose 2%
- Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 2.8%
- Japan’s Topix rose 0.4%
- Australia’s S&P/ASX 200 was little changed
- Hong Kong’s Hang Seng rose 0.9%
- The Shanghai Composite rose 0.7%
- Euro Stoxx 50 futures rose 0.5%
Currencies
- The Bloomberg Dollar Spot Index rose 0.1%
- The euro fell 0.1% to $1.1015
- The Japanese yen fell 0.4% to 134.52 per dollar
- The offshore yuan was little changed at 6.9272 per dollar
Cryptocurrencies
- Bitcoin fell 0.6% to $29,444.62
- Ether fell 0.7% to $1,906.93
Bonds
- The yield on 10-year Treasuries declined one basis point to 3.51%
- Australia’s 10-year yield advanced four basis points to 3.40%
Commodities
- West Texas Intermediate crude rose 0.5% to $75.17 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Vildana Hajric and Carly Wanna.
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