Asian shares rose Thursday, buoyed by a Wall Street rally and positive inflation updates that may lead to further Federal Reserve support for the economy. The Hang Seng surged 1.7%, while the Nikkei 225 gained 1.3%, driven by technology stocks. In the U.S., the S&P 500 climbed 0.8%, marking its first two-day gain in nearly a month, as inflation ticked up slightly to 2.7% in November.
Asian shares rose Thursday, buoyed by a Wall Street rally and positive inflation updates that may lead to Federal Reserve support for the economy. The Hang Seng surged 1.7%, while Tokyo's Nikkei 225 gained 1.3%, driven by technology stocks. In the U.S., the S&P 500 climbed 0.8%, marking its first two-day gain in nearly a month, as expectations for interest rate cuts fueled market optimism.
The Nikkei index rose 1.4% to 39,906.84 points, reaching a two-month high, driven by positive US inflation data that bolstered expectations for a Federal Reserve rate cut. The broader Topix also increased by 1.1% to 2,778.63 points. Market analysts anticipate a Bank of Japan rate hike by January, with its monetary policy decision due next week.
The Bank of Japan is expected to maintain its short-term interest rate at 0.25% during its December meeting, with strong forward guidance hinting at a potential hike in January. Recent inflation data and a notable increase in base salaries suggest conditions are ripe for a rate increase, despite a resilient economic backdrop. The upcoming decision may focus on clear communication to manage market expectations, particularly following past criticisms of the BoJ's messaging.
Coincheck Group, Japan's second-largest crypto exchange, began trading on Nasdaq on December 11 after merging with Thunder Bridge Capital, marking it as the second publicly listed dedicated crypto exchange in the U.S. The merger generated approximately $31.6 million, with expectations for a more favorable regulatory environment for digital assets under the incoming administration. Oki Matsumoto, Executive Chairman, credited the company's success to its strong Japanese foundation and strategic use of U.S. capital markets.
Swiss equities have stabilized, with financial stocks and the consumer sector showing strength, led by UBS, Logitech, and Givaudan, while Swatch and Lonza lag behind. In Japan, wholesale prices have risen for three consecutive months, driven by increased costs in food, non-ferrous metals, and plastics, prompting speculation of a potential interest rate hike by the Bank of Japan in December.
Japan's wholesale prices have risen for three consecutive months, driven by increased costs for food, non-ferrous metals, and plastics, prompting speculation of a potential interest rate hike by the Bank of Japan in December. Meanwhile, the dollar has seen mixed performance against Asian currencies, losing ground to the yen but gaining slightly against the yuan and Swiss franc. The euro remains stable against the dollar while appreciating slightly against the franc.
AUD/USD fell below $0.6400 as the RBA maintained rates at 4.35% while adopting a mildly dovish stance. Despite this drop, the pair remains above last Friday's low of $0.6373, with potential resistance at $0.6434 and $0.6482. In contrast, EUR/JPY and USD/JPY are on the rise, with USD/JPY recovering from a low of ¥148.65 and approaching the 55-day SMA at ¥150.88. Further resistance for USD/JPY is seen at ¥151.94.
The Swiss stock exchange closed down for the third consecutive day, with the SMI Index falling 1.01% to 11,642.39 points, marking its sharpest decline in nearly a month. Investor caution prevailed ahead of key economic data, including US inflation figures and upcoming rate decisions from the Swiss National Bank and the European Central Bank.In the market, Richemont and other economically sensitive stocks like ABB and Geberit faced declines, while Nestlé hit a new yearly low. The financial sector was impacted by discussions surrounding UBS's takeover of Credit Suisse, with several insurance companies also struggling.
Denmark's Nykredit has made a DKr24bn ($3.5bn) cash offer to acquire Spar Nord Bank, representing a 49% premium on its share price, with completion expected in the first half of 2025. In other news, AllianceBernstein plans to sue Switzerland over the $17bn writedown of Credit Suisse's AT1 bonds, joining a lawsuit that claims investor rights were violated during the UBS takeover. Additionally, DBS Group, Mitsubishi UFJ Financial Group, and Sumitomo Mitsui Financial Group are potential bidders for Indonesia's Panin Bank, which has seen a significant rise in its share value this year. Morgan Stanley will pay $15mn to settle SEC allegations regarding inadequate fraud prevention measures at its Smith Barney unit.
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