A gauge of Asian shares was on course to snap a three-day losing streak, buoyed by the tech sector, while US equity futures slipped after artificial intelligence stocks fueled a sharp rally in the prior session.
(Bloomberg) — A gauge of Asian shares was on course to snap a three-day losing streak, buoyed by the tech sector, while US equity futures slipped after artificial intelligence stocks fueled a sharp rally in the prior session.
Benchmark indexes rose in Japan, South Korea, India and Australia, while those for mainland China fell. Hong Kong’s market was closed Friday for a public holiday.
It was the second day of gains for chip stocks in the region following a bullish sales forecast from Nvidia Corp. late Wednesday that ignited a frenzy of interest in AI. Among notable moves in Asia, Japan’s Screen Holdings Co. surged as much as 9%, South Korea’s SK Hynix Inc. jumped 5.5% and Taiwan Semiconductor Manufacturing Co. advanced 4.6%.
The AI rally continued after hours in the US, when Marvell Technology Inc. projected 2024 revenue from the technology will at least double from a year ago. Earlier, shares of Nvidia soared 24%, propelling the company to the cusp of a $1 trillion market value.
A gauge of the dollar’s strength fell as investors continued to parse signals from US debt-ceiling talks as time grows short to avert a default. Republican and White House negotiators were said to be moving closer to an agreement to raise the debt limit and cap federal spending for two years.
Treasury yields dropped fractionally in Asian trading after rising sharply on Thursday. Yields on Australian and New Zealand government notes advanced in their wake.
Yields on treasury-bills slated to mature early next month were off recent highs while still showing that investors demand a premium on securities seen most at risk of non-payment if the government exhausts its borrowing capacity.
The yen strengthened slightly versus the greenback while remaining near 140 level. The Japanese currency has depreciated amid bets that the Federal Reserve will hike rates within the next two policy meetings while its counterpart in Tokyo sticks with ultra-loose policy.
Data Friday indicated slowing inflation in Tokyo, which supports expectations for continued divergence between the Bank of Japan and the Fed. This keeps a lid on the yen and in turn helps Japanese stocks.
“The weak yen is generally a tailwind for Japan, but over time, unless the BOJ continues to do nothing, we should probably expect the yen to strengthen,” Kieran Calder, head of equity research for Asia at Union Bancaire Privée in Singapore, said on Bloomberg Television. “The sweet spot for yen is more around 125 than where it is now.”
Read More: US on ‘Borrowed Time’ as Debt Cap Drives Cash Below $50 Billion
The debt-ceiling wrangling in Washington adds to the risks assessed by Fed officials as they consider pausing interest rate increases. Wagers for another quarter-point hike within the next two policy meetings came amid mixed data on Thursday, including a higher revised first-quarter GDP and fewer-than-expected jobless claims.
“Market is so fixated about the next rate direction rather than focusing on we are so close to the top of the interest rate cycle,” Jun Bei Liu, portfolio manager at Tribeca Investment Partners, said on Bloomberg Television. “In six months, we will really be looking at the potential for rate cuts.”
Elsewhere in markets, oil was steady after falling more than 3% on Thursday as Russia suggested OPEC+ wasn’t likely to change production levels at its next meeting.
Copper and iron ore have both breached key levels this week, pulling down the Bloomberg Commodity Index.
Key events this week:
- US consumer income, wholesale inventories, durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.2% as of 1:25 p.m. Tokyo time. The S&P 500 rose 0.9%
- Nasdaq 100 futures fell 0.2%. The Nasdaq 100 rose 2.5%
- Japan’s Topix index rose 0.2%
- China’s Shanghai Composite Index fell 0.1%
- Australia’s S&P/ASX 200 Index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.1% to $1.0739
- The Japanese yen rose 0.2% to 139.73 per dollar
- The offshore yuan rose 0.3% to 7.0678 per dollar
- The Australian dollar rose 0.1% to $0.6514
Cryptocurrencies
- Bitcoin fell 0.2% to $26,430.41
- Ether fell 0.2% to $1,806.02
Bonds
- The yield on 10-year Treasuries declined one basis point to 3.81%
- Japan’s 10-year yield was little changed at 0.430%
- Australia’s 10-year yield advanced four basis points to 3.74%
Commodities
- West Texas Intermediate crude fell 0.1% to $71.73 a barrel
- Spot gold rose 0.3% to $1,948.08 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee and Rob Verdonck.
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