Source: AFP
Hong Kong led another rally in Asian markets on Friday thanks to a rise in tech giants, while the yen extended gains against the dollar on revived hopes of US interest rate cuts.
The gains come as traders turn their attention to the release of key US jobs data due later in the day, which could play an important role in the Federal Reserve’s decision-making on when to cut borrowing costs .
A string of data this year that showed inflation was stubbornly above target while the economy and labor market remained in rough shape have in recent months seen investors cut their forecasts for rate cuts in 2024 from six in January to one or two now.
This has weighed on sentiment at trading levels, although this has been offset by a strong corporate earnings season and healthy corporate forecasts, helping to push equity markets higher.
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Comments from Fed chief Jerome Powell on Wednesday appeared to breathe some life into the rate-cutting narrative when he said that while he expected borrowing costs to remain high for longer, officials were unlikely to announce another hike.
The bank’s decision to slow the pace at which it is shrinking its balance sheet, having bought huge amounts of bonds in the past to keep interest rates low, also provided some relief.
“While the Fed appears to have ruled out a rate hike, it has also made it clear that it is willing to keep rates higher for longer,” said Chris Larkin of Morgan Stanley’s E*Trade.
“Markets will be hungry for any data that suggests the economy is not heating up more than it did in the first quarter.”
National Australia Bank’s Tapas Strickland added: “The Fed will need a build-up of evidence that inflation is easing enough before it considers cutting rates.”
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![](https://images.yen.com.gh/images/06fca084cb63c961.jpg?impolicy=cropped-image&imwidth=256)
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Wall Street’s three main indexes posted big gains on Thursday, with the Nasdaq piling up more than one percent as tech once again outperformed.
The sector was a key mover in Asia on Friday, helped by an aftermarket rally in Apple after it released top-line earnings and announced a share buyback.
Hong Kong stood out thanks to market heavyweights including Alibaba and JD.com.
Sydney, Seoul, Singapore, Wellington, Taipei and Jakarta were also good in the green. Tokyo and Shanghai were closed due to holidays.
The yen extended gains after surging against the dollar immediately after the Fed’s interest rate meeting on Wednesday, which led to speculation that Japanese authorities had intervened in the currency market for the second time this week.
Estimates show that officials spent more than $20 billion to support the unit.
That came after the yen rallied on Monday after falling to a new 34-year low of 160.17 per dollar, with reports suggesting more than $30 billion was spent in that period.
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![](https://images.yen.com.gh/images/2360fae3b925d4c2.jpg?impolicy=cropped-image&imwidth=256)
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However, the latest gains came on nascent hopes that US interest rates will be cut this year.
Keys around 0225 GMT
Hong Kong – Hang Seng Index: UP 1.8 percent at 18,538.17
Tokyo – Nikkei 225: Closed due to holiday
Shanghai – Composite: Closed for holidays
Dollar/yen: DOWN at 152.90 yen from 153.52 yen on Thursday
EUR/USD: UP at $1.0737 from $1.0731
Pound/Dollar: UP to $1.2556 from $1.2537
Euro/pound: DOWN to 85.52 pence from 85.56 pence
West Texas Intermediate: UP 0.3 percent at $79.16 a barrel
North Sea Brent crude: UP 0.2 percent at $83.87 a barrel
New York – Dow: UP 0.9 percent at 38,225.66 (close)
London – FTSE 100: UP 0.6 per cent at 8,172.15 (close)
Source: AFP