Asia’s major stock indexes ended the week on the front foot with investor mood lifted over rising hopes of a turnaround in global interest rates.
Shares across the region rose to a seven-month peak and eyed their firmest week in more than two months as traders cheered the prospect of major central banks easing back on their tightening cycles.
Japan’s Nikkei share average rose but ended the week lower for the first time in six weeks due to profit-taking, while rising bets on the central bank exiting its ultra-loose monetary policy as soon as this month also weighed on sentiment.
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The Nikkei share average was up 0.23%, or 90.23 points, to close at 39,688.94, while the broader Topix was ahead 0.30%, or 8.26 points, to 2,726.80.
The Nikkei ended 0.6% lower for the week, following five straight weekly gains, when the benchmark soared past its 1989 record high, buoyed by corporate government reforms and strong foreign inflows.
Momentum slowed after the index crossed the 40,000 level for the first time ever on Monday on profit-taking and the yen strengthened on speculation that the Bank of Japan (BOJ) could normalise policy at its March 18-19 meeting.
The Japanese currency was up 1.5% on the week, its strongest jump this year against the dollar.
China stocks struggled for direction with investors still unconvinced by the authorities’ growth target and stimulus plan this year, while Hong Kong shares tracked global peers higher on expectations of rate cuts by global central banks.
But data on Thursday showed China’s export and import growth in the January-February period beat forecasts, helping to turn around battered sentiment.
China’s blue-chip CSI300 Index gained 0.43% and the Shanghai Composite Index rose 0.61%, or 18.62 points, to 3,046.02. The Shenzhen Composite Index on China’s second exchange advanced 1.07%, or 18.27 points, to 1,719.71.
Tech giants listed in Hong Kong rose 1.3% and the territory’s benchmark Hang Seng Index added 0.76%, or 123.61 points, to close at 16,353.39. The Hang Seng China Enterprises Index climbed 0.76% too.
Elsewhere across the region, in earlier trade, Sydney, Seoul, Singapore, Taipei, Wellington, Manila, Mumbai, Bangkok and Jakarta were all well up.
Yen at One-Month High
MSCI’s broadest index of Asia-Pacific shares outside Japan peaked at 538.47 points in early Asia trade, its strongest level since August. It was last 1.15% higher, and was eyeing a weekly gain of about 2%.
Global stock indexes had in the previous session rallied to record highs after the European Central Bank (ECB) laid the ground for a potential rate cut in June, while Federal Reserve Chair Jerome Powell struck a similar tone on the path of US rates.
Eurostoxx 50 futures rose 0.16%, while FTSE futures tacked on 0.09%. S&P 500 futures gained 0.02% while Nasdaq futures fell 0.17%.
The two-year US Treasury yield, which typically reflects near-term rate expectations, fell to a one-month low of 4.4940% as traders added to bets of imminent Fed rate cuts. The benchmark 10-year yield was last at 4.0827%.
Focus now turns to the closely watched non-farm payrolls report due later on Friday for further clues on the US rate outlook, particularly after January’s blowout jobs report which stunned markets. The labour market data comes ahead of a reading on US inflation next week.
The yen hit a one-month high against the greenback at 147.54 per dollar, helped by recent commentary from BOJ officials which fuelled speculation that the central bank could soon move away from its ultra-easy monetary policy stance.
The Japanese currency was poised for its best week since December with a nearly 1.5% rise.
In commodity markets, Brent rose 48 cents to $83.44 a barrel, while US crude gained 59 cents to $79.52 per barrel.
Spot gold edged 0.06% lower to $2,156.90 an ounce after touching an all-time high of $2,164.09 in the previous session, as the prospect of an imminent Fed easing cycle boosted the appeal for the non-yielding yellow metal.
Key figures
Tokyo – Nikkei 225 > UP 0.23% at 39,688.94 (close)
Hong Kong – Hang Seng Index > UP 0.76% at 16,353.39 (close)
Shanghai – Composite > UP 0.61% at 3,046.02 (close)
London – FTSE 100 < DOWN 0.19% at 7,677.50 (0933 GMT)
New York – Dow > UP 0.34% at 38,791.35 (Thursday close)
- Reuters with additional editing by Sean O’Meara
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