Asian stock markets were trading in the green on Friday, influenced by positive cues from Wall Street overnight and amid growing expectations that major central banks, including the US Federal Reserve, may lower interest rates in the first quarter.
This optimism follows comments by US President Donald Trump, who expressed his intention to “demand that interest rates drop immediately” to boost U.S. domestic growth.
However, uncertainty surrounding Trump’s trade policies and tariff threats limited the upside in markets. On Thursday, Asian markets also ended on a mixed note.
During his speech at the World Economic Forum in Davos, Switzerland, Trump reiterated his earlier promises, including tax cuts, tariffs on trading partners, and increased energy production.
Nikkei in green as BOJ raise interest rates
The Japanese market is also seeing gains on Friday, continuing the positive trend of the last four sessions.
The Nikkei 225 Index is nearing the 40,200 level, buoyed by Wall Street’s overnight performance.
At the morning session’s close, the Nikkei 225 stood at 40,192.85, up 233.98 points or 0.59 percent, after touching a high of 40,254.64 earlier.
Among individual stocks, market heavyweight SoftBank Group is down by almost 1 percent, while Uniqlo operator Fast Retailing is up by 0.4 percent. In the automobile sector, Toyota is down by 0.2 percent, and Honda remains flat.
Japan’s core consumer price index (CPI), which excludes fresh food but includes fuel costs, increased by 3 percent year-on-year in December 2024.
This marks the highest level since August 2023 and exceeds the 2.7 percent rise seen in November, matching market expectations.
Reflecting its growing optimism about wages and inflation, the Bank of Japan (BOJ) raised its short-term policy rate to 0.5% from 0.25%, as expected.
The move, which was approved by an 8-1 vote, suggests the BOJ’s confidence in sustaining inflation around its 2% target.
Hong Kong, China stocks surge on Friday
Hong Kong stocks rose, following a rally on Wall Street on Thursday.
The positive sentiment was bolstered by President Trump’s speech at the World Economic Forum, which hinted at the possibility of improved US-China relations.
The Hang Seng Index gained around 2% to 20,061.26. The Hang Seng Tech Index saw a 3.1% rise.
Apple supplier Sunny Optical led the gainers, rising 6%. WuXi AppTec climbed 5.1%, while travel platform Trip.com advanced 4.7%.
China’s CSI 300 Index rose 0.9%, and the Shanghai Composite Index increased by 0.7%.
Trump expressed optimism about US-China relations, calling them “very good,” while also warning of tariffs on companies that do not manufacture in the US.
Other regional markets
The Australian stock market is notably higher on Friday, bouncing back from the losses of the previous session.
The benchmark S&P/ASX 200 is trading above the 8,400 level, driven by gains in financial and technology stocks, which were partially offset by weakness in mining and energy sectors.
Positive sentiment from Wall Street’s performance on Thursday added to the upbeat momentum.
South Korea’s KOSPI also rebounded strongly on Friday. The Kospi added 16.89 points, or 0.67%, to 2,532.38.
Wall Street’s record session on Thursday
US stocks mostly moved higher on Thursday, continuing the strong upward momentum observed in recent sessions.
The S&P 500 closed higher for the seventh time in the past eight sessions, setting a new record closing high.
The major averages reached new highs toward the end of the trading day.
The Dow surged 408.34 points, or 0.9%, to 44,565.07, while the S&P 500 rose 32.34 points, or 0.5%, to 6,118.71. The Nasdaq increased by 44.34 points, or 0.2%, closing at 20,051.68.
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