(Bloomberg) — Shares in Asia advanced Friday after a stellar quarter for US stocks ended on a positive note amid expectations that the world’s biggest economy will be able to achieve a soft landing.
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Japanese, South Korean and mainland Chinese stocks also rose, with much of the region, including Australia, Hong Kong and Singapore closed for a public holiday.
The gains came after Wall Street traders sent the S&P 500 to its 22nd record this year after data showed the US economy remained in good shape. A $4 trillion surge in US equity values in just three months has startled doomsayers, while leaving a host of strategists scrambling to update their 2024 targets.
“Japanese stocks are rebounding from yesterday’s drop,” said Masahiro Yamaguchi, a senior market analyst at SMBC Trust & Banking Ltd. The moves are “driven by the US stock market, as various indicators show the resilience of the US economy.”
Traders are on alert for potential swings in Japan’s currency after officials stepped up warnings this week to stem its slide. While the yen has since strengthened a little against the dollar, it remains close to levels not seen in decades.
Some recent weakening moves in the yen were speculative and not reflecting fundamentals, Japanese Finance Minister Shunichi Suzuki said Friday, adding there is no specific defense line regarding the exchange rate level.
There is a growing sense of wariness of intervention, said Taishi Fujita, associate in the global markets division for the Americas at MUFG Bank. “Even if you build a position selling the yen during a strong phase, you are likely to drop the position as it approaches 152.” He pointed out that the market may continue to hover in the low 151-yen per dollar range.
Latest data showed that consumer price growth in Tokyo moderated while staying well above the central bank’s inflation target, keeping authorities on track to consider more rate increases after they hiked earlier this month for the first time since 2007.
On China’s corporate front, one of the nation’s biggest property firms delayed its earnings report while another posted a historic profit decline. Country Garden Holdings Co. announced late Thursday it will miss a deadline for reporting annual results, saying it needs more information. Developer China Vanke Co. said net profit tumbled 46% last year.
Preferred Inflation Gauge
The S&P 500 topped 5,250, ending with a quarterly rally of over 10%. Two-year Treasury yields climbed five basis points to 4.62% in a shortened session ahead of the holiday, after Fed Governor Christopher Waller’s remarks that he’d like to see “at least a couple months of better inflation data” before slashing rates. The dollar extended its quarterly advance. Trading of cash Treasuries in Asia is closed due to the holiday.
In economic data, the US government’s two main measures of activity — gross domestic product and consumer spending — posted strong advances at the end of last year. Consumer sentiment rose markedly toward the end of March, supported partly by the strong stock-market gains.
US stocks spent most of the day struggling for direction, with traders remaining reluctant to make any big bets before the Federal Reserve’s preferred inflation gauge and Fed Chairman Jerome Powell’s remarks Friday — when markets will be closed.
Elsewhere, gold hit a fresh all-time high, extending a weeks-long rally fueled by bets on Fed rate cuts and deepening geopolitical tensions. Oil scored a 16% quarterly gain in the latest sign that export curbs by OPEC and its allies are reining in global supplies.
Bitcoin eased Friday after climbing to $71,555 in the previous session. Meantime, FTX co-founder Sam Bankman-Fried was sentenced to 25 years in prison for stealing billions of dollars from customers.
Key events this week:
Good Friday. Exchanges closed in US and many other countries in observance of holiday. US federal government is open
US personal income and spending, PCE deflator, Friday
San Francisco Fed President Mary Daly speaks, Friday
Fed Chair Jerome Powell speaks, Friday
Some of the main moves in markets:
Stocks
Japan’s Topix rose 0.4% as of 10:20 a.m. Tokyo time
The S&P 500 rose 0.1%
The Nasdaq 100 fell 0.1%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro was little changed at $1.0784
The Japanese yen was little changed at 151.35 per dollar
The offshore yuan was little changed at 7.2612 per dollar
The Australian dollar was little changed at $0.6511
Cryptocurrencies
Bitcoin rose 0.1% to $70,800.91
Ether rose 0.2% to $3,570.48
Commodities
West Texas Intermediate crude rose 2.2% to $83.17 a barrel
Spot gold rose 1.6% to $2,229.87 an ounce
–With assistance from Eddy Duan and Daisuke Sakai.
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