(Bloomberg) — Asian stocks edged higher, while the dollar and U.S. Treasuries were firm on strong U.S. trading triggered by waning expectations for the U.S. Federal Reserve's interest rate cuts.
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Japan's benchmark rose about 1%, supported by a weaker yen as Japan's economic growth slowed. South Korean stocks fell after reports that President Donald Trump may eliminate tax credits for the purchase of electric vehicles weighed on battery maker stocks. US contracts fell in early Asian trading.
The dollar was little changed after gaining for a fifth session on Thursday. Federal Reserve Chairman Jerome Powell's comments that he is in no hurry to cut interest rates pushed the dollar higher. The comments sent the yield on two-year U.S. Treasuries sharply higher and traders withdrew bets on a December rate cut.
“Powell's speech was very hawkish,” said Neil Dutta of Renaissance Macro Research. “Policy remains restrictive and we want to reach a neutral setting, so I think we'll see a rate cut again in December. That being said, Powell (and the broad consensus) on the economy I think they are satisfied with the current situation, and the downside risks are greater than they are valued in the short term.
Currencies and stocks of developing countries fell for the fifth day in a row. An index of emerging market stocks is on pace for its worst week since June 2022, while another index of emerging market currencies is on track for its worst week since August last year.
In Asia, the South Korean won fell 0.4% against the dollar after it was added to the US Treasury's “watch list” for currency practices.
Investors will also be watching the market's reaction to China's retail and industrial production data, which will be released on Friday following the stimulus measures announced by the Chinese government in the past few weeks. JD.com Inc., a leader in Chinese consumption, recorded moderate profit growth. The company's shares fell 6.6% in the US.
Other data to be released in the region includes gross domestic product for Malaysia and Hong Kong, and trade figures for Indonesia are also expected. Markets are closed in India.
In commodity markets, crude oil fell for the week, weighed down by a strong dollar and concerns that global markets will be oversupplied next year. Gold prices hovered around two-month lows.
