Asian stocks near four-month high as BOJ arrives

SINGAPORE: Asian stocks were up about four months on Friday as strong US data raised hopes that the Fed’s rate hike campaign was coming to an end and investor attention shifted to the Bank of Japan’s policy meeting. soared to all-time highs.

The MSCI’s broadest index of Asia-Pacific stocks ex-Japan gained 0.31% and is expected to rise 2.5% for the week, its best weekly performance since January. The index climbed to 534.16, the highest level since mid-February.

Japan’s Nikkei Stock Average fell 0.79%, a distance from Thursday’s 33-year high, while resource-rich Australia’s S&P/ASX 200 index rose 0.40%.

The BOJ wrapped up a busy week for the central bank on the back of widespread expectations that the central bank will stick to its ultra-loose monetary policy even as inflation rises.

Markets will be watching to see if BOJ Governor Kazuo Ueda issues stronger warnings about the risk of an inflation overshoot at his post-board press conference.

“Economic conditions are telling the BOJ that the deadline for ultra-loose policy has passed, but given Ueda’s comments, the BOJ will just sit back and wait,” said Rodrigo Catril, senior FX strategist at National Australia. It’s a consensus view,” he said. Bank.

“That said, if the BOJ wants to surprise markets, today would be a good day.”

China’s stock market rose this week after the People’s Bank of China cut borrowing costs for medium-term policy loans for the first time in 10 months to support a shaky economic recovery, and investors see more stimulus on the horizon. I expected to be there.

China’s benchmark CSI300 index rose 0.3% on Friday, while Hong Kong’s Hang Seng Index rose 0.4%.

The S&P 500 and Nasdaq surged Thursday for the first time in 14 months after data showed a surprise rise in U.S. retail sales in May and higher-than-expected U.S. jobless claims. closed at a high price.

“If the U.S. labor market is finally starting to soften, it gives some credibility to the Fed’s decision to suspend,” said Ryan Brandum, head of global capital markets in North America at Validus Risk Management. .

The plethora of data has helped fuel speculation that the Fed will not raise rates further, as it suggested on Wednesday to keep rates on hold.

Markets are now pricing in a 67% chance that the central bank will raise rates next month, according to CME FedWatch tools.

The European Central Bank on Thursday warned of risks from rising wages and revised up its inflation forecasts, leaving room for another rate hike. The ECB also raised interest rates by 25bps to 3.5%, the highest since 2001.

Strategists at NatWest Markets said: “(ECB President) Lagarde insisted there was more to cover, but the overall tone of the press conference was that of more to come, despite higher inflation expectations. “It was suggesting that there may not be much to do.” in a note.

In currency markets, the euro is trading near a one-month high of $1.0941 on Thursday after the ECB decision. [/FRX]

The US dollar index, which shows the value of the US currency against six major currencies, is at 102.13, near a one-month low.

The Japanese yen rose 0.18 percent to 140.04 yen to the dollar, well short of the seven-month low of 141.50 yen reached on Thursday.

Crude oil prices fell after a recent rally in futures on optimism about rising energy demand from China, the world’s largest oil importer.

US West Texas Intermediate crude fell 0.13% to $70.53 a barrel on the day, while Brent crude fell 0.17% to $75.54.

Gold spot rose 0.1% to $1,958.99 an ounce. US gold futures at $1,957.80 an ounce.