Japanese markets opened higher before seeing early gains erased on Friday, with Tokyo’s Nikkei 225 briefly hitting a record high as traders braced for a key US jobs report.
The broader Topix index also surpassed its previous high set in 1989. European markets moved higher on Thursday on calm election news in the UK and France.
“The fact that the Topix, which indicates the overall performance of the Japanese market, has in turn broken its own record is news of great importance,” said Tokai Tokyo Intelligence Lab analyst Takuma Ikemoto.
Japan’s Prime market capitalization has risen significantly, showing “that Japanese companies are continuously strengthening their ability to generate profits and … indicating that the Japanese stock market has entered a new phase,” he added.
The yen continued to strengthen against the dollar after hitting its lowest level in nearly four decades.
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News that Samsung Electronics forecast second-quarter profit to beat expectations by more than 25% due to rising chip prices and growing demand for genetic artificial intelligence sent its share price higher and pushed the market in Seoul.
However, shares in Hong Kong and mainland China were trading lower after the European Union imposed additional provisional duties of up to 38% on imports of Chinese electric cars on Thursday.
A European Commission investigation launched last year concluded that state subsidies for Chinese EV makers were unfairly undercutting European competitors — whom Brussels wants to protect as they transition from thermal to electric power.
Trading in Europe was dominated by two major elections, with investors eyeing polls in the UK and France.
The return of the main opposition Labor Party to power in Britain ended 14 years of Tory rule and strengthened the pound even before the results were announced.
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After a prime ministerial game of musical chairs in Downing Street, an expected period of stability has introduced optimism for investors.
In France, efforts to prevent the far-right from taking over government have boosted the euro and boosted European markets.
But analysts remain wary that the second-biggest economy in the European Union could be headed for a period of political deadlock if there is no overall winner in the polls.
Investor sentiment also rose on Thursday as softer US labor market data gave the Federal Reserve room to cut interest rates, with another key jobs report due on Friday.
“We expect US labor market data to show more signs of cooling in June,” said Alvin Tan of RBC Capital Markets.
Gains were capped, with Wall Street closed for the July 4 Independence Day holiday in the United States.
Keys around 03:30 GMT
Asian shares extend gains, dollar slips as US data builds on interest rate hope
Tokyo – Nikkei 225: DOWN 0.3 percent at 40,789.59
Hong Kong – Hang Seng Index: DOWN 1.0 percent at 17,850.47
Shanghai Composite: DOWN 1.2 percent at 2,921.92
EUR/USD: UP at $1.0823 from $1.0813
GBP/USD: UP at $1.2770 from $1.2765
Dollar/yen: DOWN at 160.62 yen from 161.16 yen
Euro/pound: UP to 84.75 pence from 84.69 pence
West Texas Intermediate: DOWN 0.2% to $83.66 a barrel
North Sea Brent crude: Down 0.3% at $87.10 a barrel
New York – Dow: Closed for a holiday
London – FTSE 100: UP 0.9 percent at 8,241.26 (close)
Source: AFP