HONG KONG (AFP) – Asian markets rose yesterday, with Hong Kong leading the way thanks to a surge in tech stocks led by ecommerce titan Alibaba.
The gains put the region on course to end a positive week on a strong note and came as traders weigh the economic outlook in light of United States (US) President Donald Trump’s tariffs drive and geopolitical machinations.
The yen pulled back a day after rallying past the 150-per-dollar mark following a warning on rising bond yields by Japan’s finance minister saw a rethink over bets on how many interest rate hikes the central bank will announce this year.
Traders have been dealing with a series of Trump headlines this week that have made them consider their investment strategies, with his mulling of more tariffs adding to inflation worries.
Minutes from the Federal Reserve’s January policy meeting, released this week, showed officials concerned that the president’s trade wars and pledges to cut taxes, regulations and immigration will force them to pause their rate cutting for now. Disappointing earnings from retail titan Walmart sparked worries about US consumer activity and the impact on the world’s top economy, and weighed on Wall Street with all three main indexes ending in negative territory.
But Asia fared, with Hong Kong piling on more four per cent to hit a three-year high.
The rally was fuelled by tech firms, and particularly Alibaba, which rocketed more than 14 per cent a day after it released forecast-busting earnings figures. The firm is now up nearly 70 per cent since the turn of the year, and the Hang Seng Index more than 17 per cent.
The Hang Seng tech index surged more than six per cent, with other household names making big moves higher.
Elsewhere in Asia, Tokyo, Shanghai, Singapore, Seoul, Manila, Bangkok and Jakarta also rose, along with Frankfurt and Paris.
The yen retreated after Japanese Finance Minister Katsunobu Kato said yesterday that rising government bond yields – which are at their highest since 1999 – could weigh on economic growth. The yen was back above 150 to the dollar, having strengthened to below that figure for the first time since December. That dented expectations the Bank of Japan (BoJ) will announce a series of rate hikes this year, even after data yesterday showed Japanese core inflation hit a 19-month high of 3.2 per cent in January.
“Kato’s remarks had traders rethinking whether the BoJ would really push ahead aggressively or if they might be nudged into a more measured, summer one-and-done approach in 2025,” said SPI Asset Management’s Stephen Innes.
“Most economists expect the next BoJ rate hike to land in the summer, but the market isn’t entirely convinced.
“Stronger-than-expected fourth-quarter gross domestic product (GDP) growth figures, notably hawkish remarks from BoJ board member Hajime Takata, and a hotter consumer price index (CPI) have amplified speculation that the tightening cycle could move faster than anticipated.”
Senior market analyst at XS.com Rania Gule added: “Kato’s remarks brought things back into focus, confirming that the central bank is not completely independent from the Ministry of Finance, which is grappling with unprecedented levels of debt to GDP.”
