Asian Stocks in Narrow Range, Yen Crosses Key Level
Asian stocks traded in a narrow range after U.S. stocks fell from record highs as a disappointing forecast from the world’s largest retailer added to concerns about the health of the economy. The yen strengthened past 150 per dollar.
Australian shares edged higher while shares in Japan fell on a stronger local currency. Stock futures pointed to early gains in Hong Kong after a gauge of U.S.-listed Chinese stocks rose as Alibaba Group Holding Ltd. reported its fastest pace of revenue growth in more than a year.
Investors in Asia will be watching for a rebound in Chinese stocks after losses on Thursday. Asian stocks have risen 2.5% this month, outperforming global peers as enthusiasm for China’s DeepSeek AI lured money into the tech sector.
“We are seeing a moderate ‘US risk-off’ flow through the market, with traders encouraged by the momentum seen in China and HK,” said Chris Weston, head of research at Pepperstone Group in Melbourne. Alibaba’s strong earnings “more than justify the recent migration of capital from concentrated U.S. tech positions into Chinese AI plays.” The yen rose past the key 150 level late Thursday to its strongest since December amid speculation the Bank of Japan will raise interest rates sooner rather than later.
Traders are pricing in about an 84% chance of a 25-basis-point hike at its July meeting, up from a 70% chance earlier in the month, according to data compiled by Bloomberg. Japanese inflation has risen more than expected, data showed on Friday. Consumer prices excluding fresh food rose 3.2% from a year earlier in January, the biggest gain since June 2023, according to the home ministry. The currency was little changed in Friday trading around 149.84.
“The CPI data, along with recent Q4 GDP and December wages data, justify the BOJ’s recent rate hike,” said Carol Kong, a strategist at Commonwealth Bank of Australia. “USD/JPY could reach our end-March forecast of 149 sooner than expected.”
The S&P 500 slipped 0.4% on Thursday as Walmart shares fell — the first major retailer to report results after the holiday season. Its chief financial officer acknowledged “uncertainties related to consumer behavior and global economic and geopolitical conditions.” That was just days after retail sales signaled a sudden pullback by consumers. Declines in banks also weighed on trading, with JPMorgan Chase & Co. and Goldman Sachs Group Inc. each falling more than 3.8%.
Retailers like Walmart tend to do well during tough economic times. It’s true that Walmart typically starts the year with conservative guidance. But the fact is that consumers are dealing with stubborn prices and high borrowing costs, and many are turning to credit cards and other debt to support their spending — with a growing number of those loans starting to default.
Elsewhere, Treasuries were little changed in early Asian trading after the 10-year yield fell three basis points to 4.51% in New York. Finance Minister Scott Bessent said any move to increase the share of long-term Treasuries in government debt issuance is a long way off given current headwinds that include high inflation and the Federal Reserve’s quantitative easing program.
In Australia, the central bank is closely monitoring the state of the labor market because persistent tightening could signal a stronger economy, Governor Michele Bullock said, adding that policy makers were not “pre-committed” to any path for interest rates. In commodities, oil headed for its biggest weekly gain since early January on rising supply uncertainty. Gold steadied after hitting a fresh record.
Source: Bloomberg
