SYDNEY, Jan 19 (Reuters) – Asian shares bounced on
Friday, buoyed by a rally in global chipmakers, while the yen
was set to end the week with heavy losses as investors pared
back bets the Bank of Japan would soon abandon its uber-easy
policies.
The stock rally is set to spill over to European markets,
with EUROSTOXX 50 futures up 0.4%. The tech-heavy
Nasdaq 100 futures climbed another 0.3%, after hitting a
record high overnight.
In Asia, MSCI’s broadest index of Asia-Pacific shares
outside Japan rallied 1.0% on Friday, but was
still down 2.7% for the week as jitters about the global
interest rate outlook dominated.
Taipei-listed shares of Taiwan Semiconductor Manufacturing
(TSMC) surged 6.3% after the chipmaking giant
projected 2024 revenue growth of more than 20%. Its U.S. shares
soared nearly 10% overnight, fuelling a broad tech rally on Wall
Street.
Japan’s Nikkei rose 1.3% to just a touch below a
34-year top hit on Wednesday. Data showed Japan’s core consumer
inflation slowed for a second straight month in December, adding
to speculation that the BOJ is not in a rush to tighten its
ultra loose monetary policy.
The yen lost 0.2% to 148.48 per dollar, having
fallen almost 2.5% for the week to the lowest level since early
December.
Chinese stocks slipped again after bouncing off five-year
lows a day before on signs of state support. Chinese bluechips
fell 0.3% while Hong Kong’s Hang Seng index eased 0.2%.
Thomas Mathews, a senior markets economist at Capital
Economics, expects decent near-term gains in Chinese equities,
forecasting the MSCI China index will rise 15% by the end of the
year.
“If we’re right that the economy will gather a bit more
momentum this quarter, sentiment could turn. But this is a
fairly near-term story: with Chinas structural problems set to
come back into focus before long, we don’t project big gains in
the country’s equities over the longer run.”
Data overnight showed that U.S. weekly jobless claims
unexpectedly dropped, adding to signs of the resilience in the
economy which tempered some hopes of a March interest rate cut
from the Federal Reserve.
Futures were still leaning towards a first rate cut in March
from the Fed but with less conviction at a 55% probability, down
from 70% last week. Meanwhile, the total easing this year stood
at 140 basis points.
The U.S. dollar index, which measures the greenback
against a basket of major currencies, was little changed on the
day but has gained 0.9% this week as central bank officials
pushed back against the aggressive easing expectations priced in
by markets.
Treasuries held mostly steady in Asia but are also set for
heavy weekly losses. The 10 year yield rose 2 basis
points to 4.1593%, up 21 basis points for the week, while the
two-year yield held at 4.3651% and up 23 bps on the
week.
Atlanta Fed President Raphael Bostic said he would be open
to reducing U.S. interest rates sooner than he had anticipated
if inflation fell faster than he expected.
The European Central Bank (ECB) also warned in minutes from
its most recent meeting that it was far too soon to discuss
policy easing.
Oil prices were on edge amid worries about increasing
geopolitical risks in the Middle East. The U.S. launched new
strikes against Houthi anti-ship missiles aimed at the Red Sea
on Thursday, while Pakistan conducted strikes inside Iran, two
days after Iranian strikes inside Pakistani territory.
U.S. crude futures were 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.
(Reporting by Stella Qiu; Editing by Sonali Paul)
