Early trading in Asian financial markets on Friday showed a slight uplift as investors braced for the Bank of Japan's (BOJ) forthcoming policy meeting, where the consensus anticipates the central bank will maintain current interest rate levels.
The MSCI index tracking Asia-Pacific shares outside Japan recorded a 0.4% increase, while Japan's Nikkei 225 index advanced marginally by 0.2%. Meanwhile, U.S. S&P 500 e-mini futures demonstrated variability, last noted with a modest 0.1% rise.
Investor optimism extended into Wall Street Thursday, where equities rallied for the second consecutive session. This spurt followed a diplomatic softening by U.S. President Donald Trump, who retracted prior threats of imposing tariffs on European imports and dismissed the notion of seizing Greenland by force. The S&P 500 climbed 0.5%, and the tech-focused Nasdaq Composite surged by 0.9%.
Observers from Societe Generale remarked that markets responded positively, citing a resurgence in risk appetite and a flattening in government bond yield curves. However, they cautioned that ongoing policy ambiguities continue to cloud the outlook, implying potential volatility ahead.
In currency markets, the Japanese yen depreciated 0.1% against the U.S. dollar, trading at 158.54 yen per dollar just ahead of the BOJ decision. This followed official data confirming that Japan's core consumer prices increased by 2.4% year-over-year in December, matching economists' forecasts.
The U.S. dollar index, which gauges the greenback against six global currencies, held steady around 98.329, lingering near its lowest points recorded this year, following its steepest drop in six weeks during the previous session.
Market participants presently assign a 96% likelihood that the Federal Reserve will maintain interest rates steady at its impending two-day meeting scheduled for January 28, according to the CME Group's FedWatch tool.
The benchmark yield on the 10-year U.S. Treasury note edged slightly higher by 0.2 basis points, reaching 4.247%.
In precious metals trading, gold prices extended a five-day uptick with a 0.3% gain, settling at $4,951.47 per ounce. Silver prices rose 1.7% to $97.85 per ounce, benefiting from the subdued U.S. dollar environment.
Within Asia, South Korean equities led regional advances. The KOSPI index rose 1.1%, marking a third consecutive day of gains. The index recently surpassed the 5,000-point threshold for the first time, a milestone linked to government initiatives aiming to reduce the so-called "Korea discount" through market reforms and fiscal policies advocated by President Lee Jae Myung.
Tech stocks, dominated by Samsung Electronics, buoyed the KOSPI’s rise. This development came despite Intel's recent guidance, which forecasted quarterly earnings below market expectations due to challenges in fulfilling demand for server chips powering AI data centers. Intel's shares fell 11% in extended trading following the release.
Energy markets showed measured recovery, with Brent crude futures ticked up 0.4% to $64.30 per barrel. This stabilization followed President Trump's softened rhetoric regarding Greenland and Iran, which alleviated earlier geopolitical supply disruption concerns.
Cryptocurrency markets saw moderate increases; Bitcoin rose 0.3% to trade at $89,499.47, while Ether inched up by 0.2% to $2,948.14.