SYDNEY, Jan 19 (Reuters) – Asian shares bounced on
Friday, buoyed by a rally in regional 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.
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, and Pakistan conducted strikes inside Iran, two
days after Iranian strikes inside Pakistani territory.
MSCI’s broadest index of Asia-Pacific shares outside Japan
rallied 0.9% on Friday, but was still down 2.9%
for the week, the biggest weekly loss since mid-August.
Taipei-listed shares of Taiwan Semiconductor Manufacturing
(TSMC) surged 5.0% after the chipmaking giant projected
2024 revenue growth of more than 20%. Its U.S. shares soared
nearly 10% overnight, fuelling a tech rally on Wall Street.
MSCI Asia ex-Japan IT index gained nearly
3%. Global X Japan semiconductor ETF was up more than
4%.
Japan’s Nikkei rose 1.6% 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 held at 148.26 per dollar, having lost
2.2% for the week to the lowest level since early December.
Chinese bluechips slipped 0.2% after bouncing off
the five-year lows hit the previous day amid signs of state
support. Hong Kong’s Hang Seng index rose 0.4%.
“Equities haven’t been spooked by the higher rates backdrop,
supported by the more robust economic backdrop and tech,” said
Tapas Strickland, head of market economics at National Australia
Bank.
“The US labour market retains its ‘Titanium Status’… Given
data resilience, it is hard to see the U.S. Fed rushing towards
cuts unless inflation continues to print lower than expected.”
Data overnight showed that U.S. weekly jobless claims
unexpectedly dropped, tempering some hopes of a March interest
rate cut from the Federal Reserve. Treasury yields crept higher
and the dollar held firm.
Treasury yields edged higher in Asia. The 10 year
rose 2 basis points to 4.167%, after an increase of
4 bps overnight, while the two-year yield crept 1 bp
higher to 4.3672%, having ended the previous day little changed.
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.
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.
In the foreign exchange market, moves were muted and the
dollar index was little changed at 103.36 against its
major peers.
Oil prices were a little lower on Friday. U.S. crude futures
were flat at $74.09 per barrel and Brent futures
were at $78.95, down 0.2% on the day.
Spot gold rose 0.1% to $2,023.89 an ounce.
(Reporting by Stella Qiu; Editing by Sonali Paul)
