The Nikkei 225 Entered Uncharted Territory on Friday, Breaking the 41,000 Barrier
On Friday, the Nikkei broke through the 41,000 barrier before easing back. The Nikkei was up 0.43% to 40,992 in the morning session.
Bank and tech stocks were among the front-runners. Investors reacted further to the Bank of Japan pivot from negative rates and comments from BoJ Governor Kazuo Ueda on Thursday. The BoJ Governor reiterated monetary policy would remain accommodative in the near term. A weaker USD/JPY is a boon for the Nikkei 225 and export-linked stocks.
Bank stocks contributed to the early gains. Sumitomo Mitsui Financial Group Inc. (8316) and Mitsubishi UFJ Financial Group Inc. (8306) rose by 1.34% and 1.62%, respectively, extending gains from Thursday.
Softbank Group Corp. (9948) and Tokyo Electron Ltd. (8035) were up by 0.49% and 1.27%, respectively.
Inflation numbers from Japan failed to spook investors despite the annual core inflation rate accelerating to 2.8%. The markets expect the BoJ to remain accommodative to avoid unnecessary strengthening of the Yen. A stronger Yen could counter efforts to drive demand-driven inflationary pressures.
On Friday, the USD/JPY was up 0.12% to 151.784. Speculation about an intervention to bolster the Yen left the USD/JPY short of the 152 handle. The USD/JPY remained below the 152 handle despite an 8-day winning streak.
Broader Asian Equity Markets Fall into Negative Territory
On Friday, the Hang Seng Index reversed gains from Thursday, falling 1.69% to 16,577 in the morning session. Real estate and tech stocks contributed to the losses. The Hang Seng Mainland Properties Index (HSMPI) and Hang Seng Tech Index (HSTECH) saw losses of 2.40% and 2.74%, respectively.
Alibaba (9988) and Tencent (0700) were down by 1.59% and 1.24%, respectively. Country Garden (2007) declined by 1.85%.
The pullback in real estate stocks came ahead of earnings from Country Garden out next week. Country Garden will put the spotlight back on the real estate sector.
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ASX 200 and the Aussie Dollar Spend Friday in Negative Territory
On Friday, the ASX 200 was down 0.37% to 7,753. Bank stocks contributed to the morning losses.
National Australia Bank Ltd. (NAB) and Westpac Banking Corp. (WBC) slid by 1.42% and 1.54%, respectively. ANZ Group Holdings Ltd. (ANZ) and Commonwealth Bank of Australia (CBA) saw losses of 0.48% and 0.75%, respectively.
Investors likely reacted to the RBA Financial Stability Review. The RBA noted most households can pay for essentials and keep up with their debts. However, the RBA highlighted banks would likely see higher loan losses.
The AUD/USD also struggled in the morning session, falling 0.30% to $0.65504.
