Asian Stocks Rise as Wall Street Extends Gains
Asian stocks rose on Thursday after stocks and bonds rose on Wall Street in a week marred by tariffs, weak tech earnings and mixed U.S. economic data.
Shares in Australia and Japan opened higher, while equity futures for Hong Kong also rose. The S&P 500 and Nasdaq 100 both posted a second day of gains on Wednesday, extending a rebound from Monday’s declines.
Treasuries were steady in early Asian trade after rallying across the curve on Wednesday. The U.S. 10-year yield fell nine basis points to 4.42% during the session while the policy-sensitive two-year yield fell three basis points to 4.18% — both the lowest since mid-December. Australian yields fell on Thursday morning.
Lower yields weighed on the dollar. The greenback’s strength index fell 0.2% to its lowest in a week, undoing a week-long rally driven by news of Donald Trump’s tariffs on Mexico, Canada and China that had initially boosted demand for defensive assets. The yen steadied after strengthening against the dollar in the previous session.
“Volatility has been the story this week, with the stock market trying to find its footing while navigating a shifting tariff landscape and mixed earnings,” said Daniel Skelly, head of Morgan Stanley Wealth Management’s Market Research & Strategy Team. The moves were partly the result of data showing weaker-than-expected demand for services. The slowdown suggests activity may slow in coming months as some Americans tighten their belts against a backdrop of high living costs.
Separate data showed employment at U.S. companies rose more than expected in January and came ahead of Friday’s closely watched jobs report. Federal Reserve officials are closely monitoring developments in the labor market as they assess how much to cut interest rates this year. A rapid rise in the unemployment rate last summer was a key driver behind policymakers’ decision to cut rates by a full percentage point in 2024. Still, the job market has shown renewed strength since then, with Fed Chair Jerome Powell describing it last week as “fairly stable.”
Meanwhile, Treasury Secretary Scott Bessent said the Trump administration’s focus on lowering borrowing costs is the 10-year Treasury yield, not the Federal Reserve’s benchmark short-term interest rate. In commodities, gold was steady after hitting a record high on Wednesday amid concerns about tight markets. U.S. oil fell more than 2% on Wednesday. Saudi Arabia raised the price of its flagship crude to Asia as the kingdom responded to soaring premiums for Middle Eastern crude and increased refinery margins.
“Uncertainty is not good in terms of the demand outlook,” Tamar Essner, head of Vectis Energy Partners, said on Bloomberg Television. “Especially in an environment where Chinese demand, which is the main driver of the demand growth story, is already in question.” Data due in Asia include trade figures for Australia, and inflation for Vietnam and Thailand. Bank of Japan’s Naoki Tamura is also due to speak on Thursday.
In Europe, the Bank of England is widely expected to cut interest rates by 25 basis points to 4.5%. Elsewhere in Asia, China has been seeking talks with the U.S. at the World Trade Organization after it imposed 10% tariffs on Chinese imports. In a document circulated on Wednesday, China said the U.S. action was “imposed on baseless and false accusations.”
Source: Bloomberg
