HONG KONG — Global stock markets experienced an upswing on Friday, buoyed by a record-setting day for U.S. equities and a decision by the Bank of Japan to increase its primary lending rate.
Oil prices saw a decline after U.S. President Donald Trump urged oil-exporting nations to lower crude prices, a move he believes will help alleviate inflation concerns.
Market responses to Trump’s recent remarks regarding potential tariff increases on imports from China and other nations were somewhat muted.
In early trading, France’s CAC 40 index rose by 0.9%, reaching 7,960.60, while Germany’s DAX index climbed by 0.3%, arriving at 21,478.43. The FTSE 100 in Britain remained relatively stable at nearly unchanged levels, recording 8,563.49. Futures for the S&P 500 and the Dow Jones Industrial Average reflected a slight dip of 0.1%.
In the Asian markets, the Nikkei 225 index in Tokyo saw a minor drop of less than 0.1%, settling at 39,931.98, following the Bank of Japan’s anticipated increase of its benchmark rate to approximately 0.5% from 0.25%. This marks the highest interest rate since 2008, indicating a shift away from a prolonged period of extremely low rates designed to encourage borrowing and spending.
The appreciation of the yen often leads to diminished profits for companies that earn revenue internationally, as these returns get converted into yen. As the U.S. dollar dipped against the Japanese yen, trading at 155.22 yen compared to 156.06 yen, shares of export-driven firms saw declines. Notably, Toyota Motor Corporation lost 1.5%, Nissan Motor Corporation saw a decrease of 2.5%, while Honda Motor Company fell by 0.8%.
Prior to the Bank of Japan’s announcement, new data revealed that Japan’s core inflation rate surged to 3% in December, marking a 16-month high and surpassing the central bank’s target of 2%.
The Hang Seng index in Hong Kong reported a notable climb, increasing by 1.9% to reach 20,066.19, and the Shanghai Composite index moved up by 0.7% to 3,252.63. South Korea’s Kospi index rose by 0.9%, closing at 2,536.80, while Australia’s S&P/ASX 200 gained 0.4% to end at 8,408.90.
On Thursday, the S&P 500 advanced by 0.5%, reaching 6,118.71, thus surpassing its previous record set early last month. This marked the seventh advance in eight days for this primary indicator of Wall Street’s performance. The Dow Jones Industrial Average gained 0.9% and the Nasdaq composite edged up by 0.2%.
These market gains occurred against a backdrop of relative stability in U.S. Treasury yields. Large fluctuations in recent months had previously unsettled the stock market, particularly amid growing inflation fears and significant U.S. government debt, which have driven yields upward.
Treasury yields experienced a brief increase following Trump’s comments about potential tariffs, made during a video address at the World Economic Forum. He indicated that products manufactured outside the U.S. may be subjected to tariffs, although specifics were lacking, leading yields to stabilize thereafter.
The yield on the 10-year Treasury rose slightly to 4.64% from 4.61% the previous day, although it remained below its peak earlier in the month. In contrast, the two-year Treasury yield fell to 4.29% from 4.30%.
Thursday’s yields maintained relative steadiness, despite a report revealing that more U.S. workers than anticipated filed for unemployment benefits last week.
Market analysts do not foresee this report influencing the Federal Reserve’s decision to lower its key interest rates during its upcoming meeting next week, based on data from the CME Group. If predictions hold, this would be the first Fed meeting since September in which no rate cut is anticipated to alleviate pressures on the U.S. economy. While rate reductions can spur investment prices, they can also exacerbate inflation concerns.
In the cryptocurrency sector, which had seen price increases driven by hopes for a more favorable stance from Washington under President Trump, bitcoin slipped below $103,000 after reaching a record high exceeding $109,000 earlier in the week, as reported by CoinDesk.
In other market activities on Friday, U.S. benchmark crude oil prices decreased by 9 cents to $74.53 per barrel, while Brent crude, the international standard, remained steady at $78.29 per barrel.
Additionally, the euro rose to $1.0495 from a previous rate of $1.0416.
