Asian shares moved toward weekly gains on Friday, supported by hopes of further global rate cuts. However, Japan’s Nikkei pulled back from record highs after the Bank of Japan signaled more steps to unwind its massive stimulus program.
In Europe, markets looked set for a flat open, with EUROSTOXX 50 futures unchanged. U.S. futures also held steady, as both the S&P 500 and Nasdaq paused after closing at record highs overnight.
The BOJ kept short-term interest rates at 0.5% as expected. Still, two board members voted in favor of a hike, surprising investors. The central bank also announced plans to begin selling its large holdings of exchange-traded funds (ETFs) and real-estate investment trusts (REITs).
Data showed Japan’s core inflation slowed to 2.7% in the year to August, its weakest pace in nine months. Even so, inflation remains above the BOJ’s 2% target. The policy dissent and news of asset sales weighed on sentiment. The Nikkei, which touched a record high earlier in the day, reversed gains to trade 0.3% lower, trimming its weekly advance to 0.9%.
The Japanese yen strengthened as the dollar dropped 0.3% to 147.51. Meanwhile, the 10-year Japanese Government Bond yield rose 4 basis points to 1.635%, close to its highest level since July 2008. Analysts noted the split vote pointed to a shift toward faster policy normalization, a potential headwind for indices such as the Nikkei and TOPIX. Markets now await comments from BOJ Governor Kazuo Ueda at his scheduled press conference.
Global central banks also dominated headlines this week. The Federal Reserve, Bank of Canada, and Norway’s central bank all cut rates, boosting hopes for more easing ahead. By contrast, the Bank of England left its benchmark unchanged.
Elsewhere in Asia, South Korea’s benchmark index slipped 0.7% but remained near record highs. It has gained over 7% in the past two weeks. MSCI’s broadest index of Asia-Pacific shares outside Japan edged down 0.2% but remained on track for a 0.6% weekly rise, holding close to a four-year peak.
Friday also marked “triple witching day,” when stock options, index options, and futures all expire at once. This tends to increase trading activity and market volatility.
In China, blue-chip stocks rose 0.6%, while Hong Kong’s Hang Seng dipped 0.1%. Traders awaited a phone call later in the day between President Donald Trump and Chinese President Xi Jinping. Market watchers were also tracking potential developments around a TikTok deal, Huawei’s chip strategy, and Beijing’s order for tech firms to avoid Nvidia’s AI chips.
On Wall Street, stocks hit record highs overnight. Optimism was fueled by upbeat jobless claims data and Nvidia’s $5 billion investment in Intel. Intel shares surged 23%, while Nvidia gained 3.5%.
In currencies, the dollar index steadied at 97.38 after falling earlier in the week to a multi-year low of 96.22. The pound held weaker at $1.3546 after the Bank of England kept rates steady.
Bond markets saw U.S. 10-year Treasury yields rise for a third session, hitting 4.1216%.
In commodities, oil prices slipped on concerns about U.S. demand. West Texas Intermediate (WTI) crude fell 0.3% to $63.38 a barrel, while Brent eased 0.2% to $67.32. Spot gold advanced 0.4% to $3,658 an ounce, as investors sought safety amid global uncertainty.
