Asian Shares to Ride Wall Street Wave of Optimism: Markets Wrap

Asian equities were on track to close the week higher, following a rebound in technology stocks that pushed Wall Street to a record high. Oil fell after President Donald Trump urged OPEC to lower crude prices and said he will push for interest-rate cuts.

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Bloomberg News

Jason Scott

Published Jan 23, 2025  •  3 minute read

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(Bloomberg) — Asian equities were on track to close the week higher, following a rebound in technology stocks that pushed Wall Street to a record high. Oil fell after President Donald Trump urged OPEC to lower crude prices and said he will push for interest-rate cuts. 

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Futures contracts pointed to gains in shares from Sydney to Shanghai, although Tokyo’s advances looked marginal ahead of a key interest rate decision by the Bank of Japan later Friday. The S&P 500 rose 0.5%, with the gauge topping the 6,100 milestone. Tech shares, which weighed heavily on the market throughout most of the session, rebounded in the final stretch of trading. A gauge of dollar strength edged lower while the yen strengthened.

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A drop in oil, which tends to ease concerns about inflation, pushed the policy-sensitive two-year yield down. Trump used an address to world leaders gathered in Davos, Switzerland, to say he would ask Saudi Arabia and other OPEC nations to “bring down the cost of oil,” casting the push for more crude output as a way to heighten pressure on Russia and help end the nearly three-year war in Ukraine. 

“Trump, rightly or wrongly, wants to see a positive supply shock in the energy sector,” said Neil Dutta at Renaissance Macro Research. “That in turn will bring down inflation expectations, which in turn, will bring down rates.”

Traders will now turn their attention to the Bank of Japan, where the central bank is widely expected to raise its benchmark rate by the most in 18 years. Governor Kazuo Ueda and his board will likely decide to increase the overnight call rate to 0.5% in a show of boosted confidence over the sustainability of inflation as Japan progresses down its normalization path. The 25 basis point increase would be the largest since February 2007. 

Meanwhile, in a bid to shore up its ailing equity market ahead, the China Securities Regulatory Commission said mutual funds should raise their holdings of onshore equities by at least 10% annually for the next three years, while large state-owned insurers will need to invest 30% of their new policy premiums from 2025.

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Elsewhere in Asia, trade data out of the Philippines, Taiwanese economic growth and Japanese national inflation numbers are all scheduled for release on Friday.

Back in the US, there’s some optimism Trump’s administration may be able to thread the needle in introducing measures that will boost growth and stocks, even while keeping a lid on prices pressures, which should allow the Federal Reserve to continue monetary easing this year.

The stock market is in a “calm before the storm mode” ahead of next week’s Fed decision press conference and the start of the big-tech earnings season, according to James Demmert at Main Street Research. “Both of which are likely to cause market volatility.”

Demmert sees any further consolidation or correction in stocks as an opportunity for investors. 

“We are still early in the AI and technology-led business cycle and bull market, which is now roughly two years old, and may last for another five years,” he noted.

In other news, Bitcoin turned negative after Trump’s executive actions establishing a working group on digital assets fell short of expectations, while gold pared losses on Thursday.

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Key events this week:

• Bank of Japan policy meeting, Friday
• Eurozone HCOB Manufacturing & Services PMI, Friday
• US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI, Friday

Some of the main moves in markets:

Stocks

• Hang Seng futures rose 0.3% as of 7:34 a.m. Tokyo time
• S&P/ASX 200 futures rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro was little changed at $1.0418
• The Japanese yen was little changed at 156.04 per dollar
• The offshore yuan was little changed at 7.2852 per dollar
• The Australian dollar was little changed at $0.6287

Cryptocurrencies

• Bitcoin rose 1.3% to $104,492.01
• Ether rose 1.7% to $3,304.38

Bonds

• Australia’s 10-year yield advanced four basis points to 4.51%

Commodities

• Spot gold was unchanged at $2,754.87 an ounce

This story was produced with the assistance of Bloomberg Automation.

—With assistance from Rita Nazareth.

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