Asian markets news: Shares bounce on global tech rally, yen loser of the week

MSCI Asia ex-Japan IT index gained nearly 3 per cent. Global X Japan semiconductor ETF was up more than 4 per cent.

Nikkei rose 1.6 per cent. (Image source | Reuters)

Asian markets news: Shares bounced on Friday, buoyed by a rally in regional chipmakers, while the yen was set to end the week with heavy losses as investors pared back bets the Bank of Japan would soon abandon its uber-easy policies.

Oil prices were on edge amid worries about increasing geopolitical risks in the Middle East. The U.S. launched new strikes against Houthi anti-ship missiles aimed at the Red Sea on Thursday, and Pakistan conducted strikes inside Iran, two days after Iranian strikes inside Pakistani territory.

MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.9 per cent on Friday, but was still down 2.9 per cent for the week, the biggest weekly loss since mid-August.

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Taipei-listed shares of Taiwan Semiconductor Manufacturing surged 5.0 per cent after the chipmaking giant projected 2024 revenue growth of more than 20 per cent. Its U.S. shares soared nearly 10 per cent overnight, fuelling a tech rally on Wall Street.

MSCI Asia ex-Japan IT index gained nearly 3 per cent. Global X Japan semiconductor ETF was up more than 4 per cent.

Japan's Nikkei rose 1.6 per cent to just a touch below a 34-year top hit on Wednesday. Data showed Japan's core consumer inflation slowed for a second straight month in December, adding to speculation that the BOJ is not in a rush to tighten its ultra loose monetary policy.

The yen held at 148.26 per dollar, having lost 2.2 per cent for the week to the lowest level since early December.

Chinese bluechips slipped 0.2 per cent after bouncing off the five-year lows hit the previous day amid signs of state support. Hong Kong's Hang Seng index rose 0.4 per cent.

"Equities haven't been spooked by the higher rates backdrop, supported by the more robust economic backdrop and tech," said Tapas Strickland, head of market economics at National Australia Bank.

"The US labour market retains its 'Titanium Status'... Given data resilience, it is hard to see the U.S. Fed rushing towards cuts unless inflation continues to print lower than expected."

Data overnight showed that U.S. weekly jobless claims unexpectedly dropped, tempering some hopes of a March interest rate cut from the Federal Reserve. Treasury yields crept higher and the dollar held firm.

Treasury yields edged higher in Asia. The 10 year rose 2 basis points to 4.167 per cent, after an increase of 4 bps overnight, while the two-year yield crept 1 bp higher to 4.3672 per cent, having ended the previous day little changed.

Futures were still leaning towards a first rate cut in March from the Fed but with less conviction at a 55 per cent probability, down from 70 per cent last week. Meanwhile, the total easing this year stood at 140 basis points .

Atlanta Fed President Raphael Bostic said he would be open to reducing U.S. interest rates sooner than he had anticipated if inflation fell faster than he expected.

The European Central Bank (ECB) also warned in minutes from its most recent meeting that it was far too soon to discuss policy easing.

In the foreign exchange market, moves were muted and the dollar index was little changed at 103.36 against its major peers.

Oil prices were a little lower on Friday. U.S. crude futures were flat at $74.09 per barrel and Brent futures were at $78.95, down 0.2 per cent on the day.

Spot gold rose 0.1 per cent to $2,023.89 an ounce.

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