(Bloomberg) — Asian tech stocks fell on Friday, echoing Wall Street’s declines, while the yen was shaky, as slowing U.S. inflation prompted investors to pull out of big tech companies.
Most read articles on Bloomberg
On Thursday, the Nasdaq 100 Index fell 2.2% after slowing inflation data that supports a rate cut, while an index of Asian technology stocks slid 3.2% after a buyback from big tech stocks.
Australian and Chinese shares rose after an index of Chinese property developers rose about 5 percent, on pace to its highest since May. Tech-heavy shares in South Korea and Japan fell, with Japan pressured by the yen’s rise against the dollar on Thursday.
The Japanese yen swung wildly on Friday, putting traders on edge amid speculation that authorities had stepped in to officially support it.The Bank of Japan conducted a so-called rate check in the foreign exchange market, signaling possible intervention, traders with direct knowledge of the matter told Bloomberg News.
“They’ve played their cards right and they’ve intervened. They’re going to have to keep intervening to maintain their credibility,” Adarsh Sinha, co-head of Asia currency and rates strategy at Bank of America Securities, said of Japan’s Finance Ministry on Bloomberg TV. “It remains a tough challenge.”
U.S. Treasuries eased Thursday’s gains in early trading on Friday, with the 10-year Treasury yield falling 7 basis points to 4.21% in the previous trading day on the prospect of lower U.S. interest rates.
The dollar index was flat after dropping its biggest since May on Thursday. Australian and New Zealand government bonds opened higher.
Chicago Fed President Austan Goolsby called the CPI data “excellent” and said the report provides confident evidence that the central bank is on track to reach its 2% target.
For Chris Larkin of Morgan Stanley’s E*Trade, Thursday’s “Fed-friendly CPI” was another step toward a September rate cut. The question remains whether the surging stock market has already priced in multiple rate cuts, he said.
U.S. small-cap stocks have been among the main beneficiaries: The Russell 2000 index of mid-cap stocks outperformed the Nasdaq 100 by 5.8 percentage points on Thursday, its biggest gain since November 2020.
Steve Eisman of Neuberger Berman Group predicts the outsized strength of big U.S. technology stocks “will continue for years” as artificial intelligence becomes more accessible to consumers through their electronic devices.
“You need to own large tech stocks,” he said in an interview on Bloomberg Television on Thursday.
In Asia, economic data due for release on Friday include China’s trade, Japan’s industrial production and India’s inflation. China’s money supply and new lending data are also likely to be released on Friday.
West Texas Intermediate crude oil rose for a third straight day on Friday, buoyed by an increase in the Consumer Price Index (CPI). Gold fell after a sharp rise on Thursday.
Major events this week:
-
China trade, Friday
-
University of Michigan Consumer Sentiment Index, U.S. Producer Price Index, Friday
-
Citigroup, JPMorgan and Wells Fargo to report earnings on Friday
Some of the key market developments:
stock
-
S&P 500 futures were unchanged as of 11:39 a.m. Tokyo time
-
Japan’s TOPIX falls 1%
-
Australia’s S&P/ASX 200 rose 0.9%
-
Hong Kong’s Hang Seng Index rose 1.7%
-
The Shanghai Composite Index was little changed
-
Euro Stoxx 50 futures little changed
currency
-
The Bloomberg Dollar Spot Index was little changed.
-
The euro was little changed at 1.0867 dollars
-
The Japanese yen weakened 0.3% to 159.29 yen to the dollar.
-
The offshore yuan weakened 0.1% to 7.2766 yuan per dollar.
Cryptocurrency
-
Bitcoin fell 0.6% to $57,204.55.
-
Ether fell 0.5% to $3,099.64.
Bonds
-
The yield on the 10-year Treasury note rose 1 basis point to 4.22%.
-
Japan’s 10-year government bond yield fell 2 basis points to 1.060%.
-
Australia’s 10-year government bond yield fell 3 basis points to 4.35%.
merchandise
-
West Texas Intermediate crude rose 0.6% to $83.13 a barrel.
-
Spot gold fell 0.3% to $2,408.72 an ounce.
This story was produced with assistance from Bloomberg Automation.
(An earlier version of this article corrected an explanation of U.S. core CPI.)
Most read articles on Bloomberg Businessweek
©2024 Bloomberg LP
