Asian equity markets moved higher on Friday, driven by strength in technology shares, as investors reacted to an overnight rally on Wall Street after Federal Reserve Governor Christopher Waller signaled that recent data show signs of disinflation and that he would lean toward leaving interest rates unchanged at this month’s meeting if upcoming reports confirm easing price pressures.
All three major U.S. benchmarks rose by more than 1% in the prior session, and U.S. stock index futures were little changed in Asian trading Friday. The change in market expectations for U.S. policy prompted buying in interest-rate-sensitive sectors, particularly technology.
Regional movers and market action
In Tokyo, the Nikkei 225 climbed by more than 1%, helped by a strong performance from SoftBank Group (TYO:9984), which surged over 10%. That advance in Japanese equities was tempered by a sharply firmer yen - the currency has strengthened roughly 2.6% this week as markets increasingly price in the possibility of a Bank of Japan rate increase at its September meeting.
South Korea’s KOSPI rose 1.4%, with chip-sector heavyweights Samsung Electronics (KS:005930) and SK Hynix (KS:000660) gaining 1.6% and 2.4%, respectively. In Hong Kong the Hang Seng jumped 2.2%, led by sizeable rallies from Chinese tech names Alibaba (HK:9988) and Baidu (HK:9888), each climbing more than 4%.
Technology stocks broadly benefited from a softer near-term interest-rate outlook. On Wall Street the Nasdaq Composite, a tech-heavy benchmark, closed 1.4% higher as large AI-related megacap issues helped push the index up.
Market-implied odds of a Fed rate increase this month eased after Waller’s remarks, with the probability falling to about 50% from roughly 63% earlier in the week, according to CME FedWatch. The shift also reduced pressure in the bond market, with the U.S. 10-year Treasury yield last quoted at about 4.768% after easing overnight.
Other markets and economic drivers
In mainland China the Shanghai Composite and the Shanghai Shenzhen CSI 300 each advanced about 0.5%. Singapore’s Straits Times Index rose 1.1%, while Australia’s S&P/ASX 200 bucked the regional rally and edged 0.1% lower. Futures tied to India’s Nifty 50 ticked down roughly 0.2%.
Investors were focused on the U.S. nonfarm payrolls report scheduled for later in the day. Economists expect the unemployment rate to remain at 4.1%. A weaker-than-expected payrolls print could further reduce the chance of a Fed increase this month, while a stronger print could revive bets on an additional hike.
Oil prices stayed elevated, with Brent crude near $96 a barrel and up about 7% for the week, as geopolitical tensions in the Middle East and uncertainty about flows through the Strait of Hormuz kept inflation risks in focus.
What to watch next
Market participants will parse the U.S. jobs data for confirmation that price pressures are easing and to refine expectations for Fed actions. At the same time, currency moves - notably the yen’s sharp weekly gain - and elevated oil prices remain important market cross-currents that could influence equity and fixed-income performance in the near term.