(Bloomberg) — Asian equities fell and the yen strengthened Friday as Tokyo inflation data exceeded estimates. US equity futures climbed as investors prepared for cash trading to resume after the Thanksgiving holiday.
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Shares in Australia, Japan and South Korea fell. The moves followed an advance for European stocks on Thursday, with tech companies outperforming.
The yen rose to the highest level in more than a month against the greenback. The dollar slipped against major currencies and an index of dollar strength headed for its first weekly decline in two months. US Treasury yields fell as cash trading in Asia resumed after a break on Thursday.
The moves underscored the muted appetite for risk across global markets during a week that is typically marked by lower volumes due to the US holiday. Month-end positioning may also prompt some investors to rebalance portfolios after a record high for US stocks this week.
Gains for Japan’s currency were helped along by Tokyo inflation data that showed prices rose more than expected on a headline basis, but broadly in line with estimates once fresh food and energy were excluded. Swaps market pricing indicates a more than 50% chance the Bank of Japan will raise interest rates when it meets next month.
“The CPI report will probably strengthen the BOJ’s conviction that inflation momentum is building, with its 2% target looking increasing secure,” said Taro Kimura, an economist with Bloomberg Economics.
Japan may also delay a decision on raising taxes to help cover rising defense spending, a senior ruling coalition official said.
Australian bond yields fell across the curve in early trading after Reserve Bank Governor Michele Bullock said core inflation remains too high and pushed back on expectations of near-term rate cuts. The Australian dollar was slightly stronger against the dollar Friday.
Elsewhere in currency markets, Brazil’s real tumbled to a record low on disappointment over a government plan to cut spending, while Mexico’s peso rallied amid thin trading due to the US holiday.
European Stocks
In Europe, stocks snapped two days of declines, with technology leading the advance amid hopes that US curbs on chip equipment sales to China may prove lighter than feared. The US is considering measures on sales of semiconductor equipment and AI memory chips to China that would stop short of stricter limits previously under discussion, Bloomberg News reported.