The Tokyo Stock Price Index displayed on a rotating-cube screen in an atrium of the Kabuto One building, next the Tokyo Stock Exchange, in Tokyo, Japan, on Tuesday, June 7, 2022. Japan equities were mixed after the yen slid to a 20-year low versus the dollar as the gap between domestic and US yields widened. Photographer: Akio Kon/Bloomberg
(Bloomberg) -- Stocks in Asia rose after US technology shares drove gains on Wall Street, despite pressure on financials after Federal Reserve officials reiterated their resolve to lower inflation.
Equities climbed in Japan, South Korea and Australia and futures for benchmark in Hong Kong advanced, setting them on a course to notch second consecutive quarterly gains. The S&P 500 climbed 0.6% Thursday while the tech-heavy Nasdaq 100 rose 0.9%, pushing further into a bull market.
Treasuries were little changed and the dollar was weaker against major peers. The yen was the biggest decliner versus the greenback among Group-of-10 currencies.
The gains on Wall Street came as market watchers digested a round of Fed commentary suggesting more monetary tightening was necessary, even after the collapse of three US banks earlier this month. Boston Fed President Susan Collins said tightening was needed, while Richmond Fed President Thomas Barkin said the Fed can raise rates more if inflation risks persist.
Positive signals out of China are helping the Bloomberg Commodity Index pare its quarterly loss, with oil recovering half of the ground it lost since early March. Most market watchers are still betting on China’s recovery underpinning a price rally later this year.
That optimism is also apparent in Chinese equities. Alibaba Group Holding Ltd.’s logistics arm Cainiao Network Technology Co. — currently valued at more than $20 billion — has started preparations with banks for its Hong Kong initial public offering. Meanwhile, shares in rival JD.com soared in the US after two of its subsidiaries filed for IPOs in Hong Kong.
Friday’s trading may be choppy amid quarter-end rebalancing from pension funds and options hedging activity but the outlook is bullish for US stocks in April, according to Scott Rubner, a Goldman Sachs Group Inc. managing director.
Investors expect US rates to sit around 4.2% by the end of the year, around 80 basis points lower than the current level.
“You have to assume now that the game has changed and that the Fed is gonna be more moderate,” Rick Rieder, chief investment officer of global fixed income at BlackRock Inc., said on Bloomberg Television. “We’re at levels today that are very restrictive.”
However, several strategists have said markets are wrong to expect rate cuts this year as the labor market remains robust, though US unemployment claims ticked up for the first time in three weeks. And high inflation — as measured by the so-called PCE Core Deflator due Friday — is expected to have persisted last month.
Back in Asia, FTSE Russell will keep South Korea on the watch list for inclusion to its global bond index — and India for the emerging-market equivalent — prolonging the countries’ wait to get into key market gauges.
Elsewhere, oil traded near a two-week high. Gold was little changed.
Key events this week:
China PMI, Friday
Eurozone CPI, unemployment, Friday
US consumer income, PCE deflator, University of Michigan consumer sentiment, Friday
ECB President Christine Lagarde speaks, Friday
New York Fed President John Williams speaks, Friday
Some of the main moves in markets:
S&P 500 futures rose 0.2% as of 9:01 a.m. Tokyo time. The S&P 500 rose 0.6%
Nasdaq 100 futures rose 0.2%. The Nasdaq 100 rose 0.9%
Japan’s Topix index rose 1%
Australia’s S&P/ASX 200 Index rose 0.8%
Hong Kong’s Hang Seng futures rose 1%
The Bloomberg Dollar Spot Index was little changed
The euro was unchanged at $1.0905
The Japanese yen fell 0.4% to 133.28 per dollar
The offshore yuan was little changed at 6.8766 per dollar
The Australian dollar was little changed at $0.6717
Bitcoin fell 0.4% to $28,040.33
Ether was little changed at $1,794.21
The yield on 10-year Treasuries was unchanged at 3.55%
Australia’s 10-year yield declined five basis points to 3.31%
West Texas Intermediate crude was little changed
Spot gold fell 0.1% to $1,978.08 an ounce
(Source: Bloomberg), all rights reserved by original source.