Asian equities posted a modest gain at the open after recent selling pressure eased and US inflation data supported the outlook for the Federal Reserve to cut interest rates this year.
Shares opened higher in Japan, where gross domestic product eked out growth in the fourth quarter of 2025, reversing from a deep contraction in the previous period. The yen was little changed. Australian shares also inched higher as trading began in a week marked by Lunar New Year holidays, which will affect markets across the region. Mainland China will be closed all week, while US markets are closed Monday for Presidents' Day.
Spot gold and silver — assets that have rallied alongside stocks this year — edged lower in early trading. The dollar was steady against major currencies, while Bitcoin traded around $68,700 after swinging over the weekend. Oil was little changed.
The moves indicated a broadly supportive backdrop for markets after the S&P 500 notched consecutive weekly declines driven by uncertainty over the disruptive impact of AI on businesses. Some of that pressure eased after data on Friday showed the US consumer price index rose 0.2% in January, the smallest gain since July, as traders priced in higher chances the Fed will ease.
Photo Credit: Bloomberg
“Overall, this won't change Fed policy, but it will ease the path towards a cut in rates sooner rather than later,” said Neil Birrell at Premier Miton Investors.
The inflation data lifted Treasuries on Friday, with the US 10-year and the policy-sensitive two-year yields dropping five basis points. There will be no cash trading in Treasuries Monday. Australian yields also fell early Monday.
Traders continued to fully price in a Fed rate cut in July, as well as a strong likelihood of a move in June.
Fed Bank of Chicago President Austan Goolsbee said the central bank can cut rates further if inflation is on track to reach its 2% target, but that's not currently the case.
“Right now we are not on a path back to 2%. We're kind of stuck at 3%, and that's not acceptable,” Goolsbee said Friday on Yahoo! Finance.
Elsewhere, Chinese President Xi Jinping signaled a desire to “fully leverage the advantages of China's super-large-scale market,” as he called for anchoring economic growth around domestic demand in a speech released Sunday.
Goldman Sachs Group Inc. upgraded its forecast for China's current-account surplus this year. Meanwhile, a worsening earnings picture is darkening the outlook for Chinese equities.
Earlier on Friday, the Pentagon added Alibaba Group Holding Ltd., BYD Co., Baidu Inc. and TP-Link Technologies Co. to a list of companies that aid the Chinese military – before withdrawing it minutes later without explanation.
Corporate Highlights:
- Warner Bros Discovery Inc. is considering reopening sale talks with rival Hollywood studio Paramount Skydance Corp. after receiving its hostile suitor's most recent amended offer, people with knowledge of the matter said.
- New Zealand infant formula distributor a2 Milk boosted first-half earnings and raised full-year revenue guidance as sales in China continue to strengthen. Shares rose.
- A group led by Macquarie Asset Management will buy Qube Holdings Ltd. in a deal worth around A$11.7 billion ($8.3 billion).
- Australian vintner Treasury Wine Estates Ltd. reported lower-than-expected revenue, citing US supply chain difficulties and adverse consumer trends in China.
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.1% as of 9:02 a.m. Tokyo time
- Japan's Topix rose 0.1%
- Australia's S&P/ASX 200 rose 0.2%
- Euro Stoxx 50 futures fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1866
- The Japanese yen was little changed at 152.80 per dollar
- The offshore yuan was little changed at 6.9043 per dollar
- The Australian dollar was little changed at $0.7070
Cryptocurrencies
- Bitcoin fell 0.1% to $68,731.57
- Ether rose 0.4% to $1,966.11
Bonds
- Australia's 10-year yield declined four basis points to 4.71%
Commodities
- West Texas Intermediate crude was little changed
- Spot gold fell 0.5% to $5,014.59 an ounce
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