Asian stocks rallied, with MSCI’s regional gauge nearing a record high, after US inflation and jobless claims data cemented expectations the Federal Reserve will cut interest rates next week.
Benchmark share indexes rose in Japan, South Korea, Australia and Hong Kong, outweighing a mixed day for mainland China equities. Chipmakers including SK Hynix Inc., Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. were among the biggest contributors to Friday’s gains.
The MSCI regional equity gauge has now climbed more than 20% this year, and is within 0.3% of its all-time high set in 2021. The bullish moves Friday followed new record on Thursday for the S&P 500, the tech-heavy Nasdaq 100 and MSCI index of global shares.
“Asian equities hardly needed more excuses to rally,” said Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne. “The Nikkei 225 is ripping higher” with the potential to break about 45,000 in the near term, he said.
US inflation data published Thursday showed consumer price index data stripping out food and energy rose 0.3% in August, in line with economists forecasts. Weekly jobless claims increased to the highest level in almost four years, emboldening bets Fed policymakers will lower rates at their Sept. 16-17 meeting.
Alibaba Group Holdings Ltd. shares jumped as much as 7.3% in Hong Kong after the company’s US-listed depositary receipts rallied 8% Thursday amid optimism over the company’s steps to boost its AI infrastructure budget.
Treasuries edged lower in Asia after rallying Thursday following the US economic data. Bloomberg’s gauge of the dollar gained 0.1%, but still heading for its biggest weekly decline in a month.
In Asia, data on the docket for release includes industrial production for Japan and inflation for India. Money supply and new loans data for China may be released any time through Sept. 15.
Elsewhere, Hyundai Motor Co. said a battery plant that was raided by US immigration authorities is being delayed as the companies faced labor shortages.
Oil fell for a second day after the International Energy Agency projected an even bigger surplus next year, with the bearish outlook offsetting concerns about global geopolitical tensions. Gold headed for a fourth weekly gain.
Microsoft Corp. shares climbed in post-market trading after the tech giant and OpenAI said they had reached an agreement, while Adobe Inc. shares also advanced in extended trading after it gave a strong quarterly revenue outlook.
A slowing US jobs market has prompted markets to price a more aggressive trajectory of policy easing. Swaps pricing indicates traders anticipate the equivalent of between two or three quarter point cuts through year-end.
“Right now, inflation is a key subplot, but the labor market is still the main story,” said Ellen Zentner at Morgan Stanley Wealth Management. Thursday’s “CPI may appear to offset yesterday’s PPI, but it wasn’t hot enough to distract the Fed from the softening jobs picture. That translates into a rate cut next week — and, likely, more to come.”
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 12:35 p.m. Tokyo time
Nikkei 225 futures (OSE) rose 0.8%
Japan’s Topix rose 0.6%
Australia’s S&P/ASX 200 rose 0.7%
Hong Kong’s Hang Seng rose 1.4%
The Shanghai Composite rose 0.2%
Euro Stoxx 50 futures rose 0.1%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1726
The Japanese yen fell 0.2% to 147.44 per dollar
The offshore yuan was little changed at 7.1177 per dollar
Cryptocurrencies
Bitcoin rose 0.7% to $115,224.89
Ether rose 1.9% to $4,500.39
Bonds
The yield on 10-year Treasuries advanced one basis point to 4.03%
Japan’s 10-year yield advanced 1.5 basis points to 1.590%
Australia’s 10-year yield was little changed at 4.23%
Commodities
West Texas Intermediate crude fell 0.9% to $61.78 a barrel
Spot gold rose 0.5% to $3,651.01 an ounce
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