Asian and US futures rise as BOJ maintains key interest rate
Asian shares and US futures experienced a slight increase on Friday as the US managed to recover some of its losses following a series of tumultuous days. Tokyo’s Nikkei 225 rose by 0.2 per cent to 53,800.28 following the Bank of Japan’s decision to maintain its key interest rate, a move that was anticipated. The central bank has increased the policy rate to 0.75 percent as of December. Concluding its policy meeting, it also made a modest adjustment to its projections for future inflation and economic growth. The Japanese yen experienced a decline against the US dollar, which was trading at 158.64 yen, an increase from 158.42 yen. “With underlying inflation price pressures remaining firm, we expect the Bank of Japan to resume its tightening cycle in the coming months,” Abhijit Surya said in a commentary. Chinese markets experienced moderate gains, with the Hang Seng in Hong Kong increasing by 0.3 percent to 26,718.13, and the Shanghai Composite index also rising by 0.3 percent, reaching 4,133.58. South Korea’s Kospi rose by 0.6 percent, reaching 4,983.36. The benchmark reached above 5,000 for the first time on Thursday, only to retreat later in the day. In Australia, the S&P/ASX 200 increased by 0.2 per cent, reaching 8,862.20. Taiwan’s Taiex surged by 0.8 percent, while India’s Sensex remained nearly stable.
On Thursday, the S&P 500 rose by 0.5 percent to 6,913.35, continuing its upward trend following US President Donald Trump’s decision to cancel tariffs on European nations that he claimed resisted his proposals for US oversight of Greenland. The Dow Jones Industrial Average increased by 0.6 percent, reaching 49,384.01, while the Nasdaq composite saw a rise of 0.9 percent, climbing to 23,436.02. Information was limited regarding an agreement on Greenland that Trump claimed to have secured with the leader of NATO, causing investors to feel apprehensive about future developments. It remains unsigned at this time. It was the most recent instance of Trump issuing a significant, initial threat, only to retract it following a dramatic response in financial markets. The pattern has given rise to the “TACO” acronym, indicating that “Trump Always Chickens Out” when markets respond with significant intensity. Tuesday’s decline in the US stock market marked the most significant downturn since October, prompting Trump, who frequently claims credit for market’s successes, to recognize “the dip.”
JPMorgan Chase experienced a 0.5 per cent increase following a lawsuit initiated by Trump against the bank, which resulted in minor fluctuations in its stock. Trump alleged that JPMorgan Chase closed his accounts due to political motivations following his departure from office in 2021. Treasury yields remained relatively stable, indicating that foreign investors were not hastily exiting the US bond market. Yields received a boost from reports indicating that the US economy’s strength surpassed expectations. One noted that fewer US workers applied for unemployment benefits last week than economists anticipated, which may indicate that the rate of layoffs continues to be low. A second indicated that the US economy expanded at a quicker pace over the summer than previously projected by the government. A third noted that inflation in November aligned closely with economists’ expectations, while consumer spending in the US exceeded expectations slightly.
Global markets have stabilized after a reduction in long-term Japanese government bonds, which had surged earlier in the week due to concerns that Japan’s Prime Minister Sanae Takaichi could implement measures that would significantly increase the government’s already substantial debt. The yield on the 40-year Japanese government bond retreated after reaching a historic high of over 4 percent. It was trading at 3.0955 percent early Friday. In other dealings early Friday, the price of gold increased by 0.8 per cent, staying near the USD 5,000 mark. Silver experienced an increase of 2.3 percent. The prices of these precious metals frequently increase when investors seek safer assets to hold. US benchmark crude oil increased by 52 cents, reaching USD 59.88 per barrel, while Brent crude, the international standard, rose by 54 cents to USD 64.60 per barrel. The euro declined to USD 1.1750 from USD 1.1755.
