The Asian stock market was trading positively on Friday. This was influenced both by the positive signals from Wall Street over the previous night and the growing expectation that central banks including the US Federal Reserve may reduce interest rates during the first quarter.
The optimism comes after US President Donald Trump’s comments that he would “demand an immediate drop in interest rates” to stimulate U.S. growth.
The markets were limited by the uncertainty around Trump’s tariffs and trade policies. The Asian market also had a mixed day on Thursday.
Trump reaffirmed his promises during his address at the World Economic Forum, held in Davos (Switzerland), including his tax cut, increased tariffs for trading partners and his promise to increase energy production.
Nikkei in green as BOJ raise interest rates
On Friday, the Japanese stock market also saw gains continuing the trend that has been positive for the past four sessions.
Nikkei’s 225 index is close to 40,200, boosted by Wall Street’s overnight performance.
After reaching a peak of 40,254.64, the Nikkei 225 closed the morning’s session at 40,192.85. This was an increase of 233.98 or 0.59 per cent.
SoftBank Group, the market leader, is down almost 1 percent while Fast Retailing, which operates Uniqlo, is up 0.4 percent. Toyota has fallen by 0.2 per cent in the automotive sector. Honda is flat.
In December 2024, the core consumer prices index in Japan (CPI) which includes all fuels but excludes fresh foods increased by 3% year-onyear.
The market expected a rise of 2.7 percent in November. This is the highest since August 2023.
As expected, reflecting its increasing optimism regarding wages and inflation the Bank of Japan raised its short term policy rate from 0.25% to 0.5%.
This move was approved with an 8-1 majority, indicating the BOJ’s confidence that it can maintain inflation at around its 2% goal.
Hong Kong stocks soar on Friday
Hong Kong shares rose following the Wall Street rally of Thursday.
Positive sentiments were boosted by the speech of President Trump at the World Economic Forum. He hinted that US-China relationships could improve.
The Hang Seng Index rose by around 2%, to 20,061.26. Hang Seng Tech Index rose 3.1%.
Sunny Optical, a supplier of Apple products, rose 6%. WuXi AppTec rose 5.1% while Trip.com, a travel website, advanced 4.7%.
The Shanghai Composite Index and China’s CSI 300 Index both increased 0.9%.
Trump expressed optimism regarding US-China relationships, calling them very good. He also warned of tariffs against companies who do not manufacture products in the US.
Regional markets
On Friday, the Australian stock exchange is up significantly from its previous losses.
S&P/ASX 200 benchmark is currently trading at 8,400, driven mainly by financial and technology shares, but also by mining and energy stocks.
The positive sentiment gained from Wall Street’s performance Thursday has added to the momentum.
The KOSPI in South Korea also recovered strongly Friday. The Kospi gained 16.89 points or 0.67% to 2,532.38.
Wall Street records a record-breaking session on Thursday
US stocks mostly rose on Thursday as they continued the upward trend observed in recent sessions.
S&P 500 has closed at a record high for the 7th time in 8 sessions.
Major averages hit new highs at the close of trading.
The Dow soared by 408.34 points or 0.9% to 44,565.07 while the S&P 500 climbed 32.34 points or 0.5% to 6,118.71. The Nasdaq closed at 20,051.68 after gaining 44.34 or 0.2% points.
As new information becomes available, this post Nikkei, Hang Seng and CSI300 lead Asian markets higher; Nikkei extends its gains into 5th Day may be updated.
