Asian shares ended the week quietly following a recent peak earlier in the week, prompting profit-taking amid a stronger U.S. dollar due to rate cuts by European central banks, which continued to weigh on the yen towards intervention levels.
During the night, the Swiss National Bank lowered rates for the second time, while the Bank of England hinted at possible easing in August after maintaining rates. This led to declines in sterling, the Swiss franc, and the euro, bolstering the dollar broadly.
MSCI's index of Asia-Pacific shares outside Japan fell 0.6% on Friday, primarily due to a retreat in technology shares, reflecting a mixed session on Wall Street. The index is on track for a weekly gain of 1%, having reached its highest level since April 2022 on Wednesday, supported by weaker U.S. economic data reinforcing expectations of two Fed rate cuts later this year.
Japan's Nikkei edged up 0.1%, while the yen softened by 0.1% to 159.01, its weakest level since late April when Japanese authorities intervened to stabilize its rapid decline. Earlier data showed Japan's inflation, driven by demand, slowed in May, complicating the outlook for interest rate hikes.
Chinese stocks were largely flat, with the Shanghai Composite struggling to stay above the critical 3,000-point mark, while Hong Kong's Hang Seng index dropped 0.9%.
In currency markets, the euro remained under pressure at $1.0705, down 0.4% overnight amid ongoing European rate cuts, while sterling held steady at $1.2658, its lowest in five months. The dollar also strengthened against the Swiss franc at 0.8916 francs, up 0.8% overnight.
In contrast, Australia's dollar surged to a 17-year high against the yen at 105.85 yen due to a still hawkish outlook from the country's central bank.
Treasuries are poised to finish the week lower, with two-year yields up 2 basis points on Friday to 4.745%, and the 10-year yield rising 1 basis point to 4.2672%, reflecting a weekly increase.
Oil prices consolidated after reaching seven-week highs earlier in the week, with Brent futures slipping 0.1% to $85.59 a barrel and U.S. crude also down 0.1% to $81.19 a barrel. Gold prices remained unchanged at $2,358.83 per ounce.
Paraphrasing text from "Reuters" all rights reserved by the original author.
