Japan’s yen fell to its lowest in six weeks and Tokyo’s Nikkei 225 jumped 1.4% after the Bank of Japan faced down persistent speculation of a sudden tightening of its ultra-loose monetary stance, with new Governor Kazuo Ueda opting instead for a broad review on how to phase out the policy.
Keeping BOJ bond-buying alive for the time being despite another rise in Japanese inflation, the news followed rearview mirror readouts from the United States and Europe on how gross domestic product unfolded in the first quarter.
While U.S. GDP growth slowed more than forecast to an annualised 1.1%, that was mainly due to a big rundown in inventories untypical of an economy fearful of recession and it masked an acceleration in consumer spending during the quarter.
Europe was even harder to read – a disappointing Q1 flatline in Germany but forecast-beating brisk expansions in Italy and Spain and a mixed bag of April inflation soundings.
The net result of the blizzard of incoming economic and earnings news, a stock market jump and the U.S. debt ceiling standoff has seen a sharp back-up in bond yields. Two-year U.S. Treasury yields are back above 4%, even though they’re off Thursday’s highs ahead of the U.S. market open today and next week’s Federal Reserve policy decision.
Helped by the yen swoon, the dollar index is higher.
With the Fed meeting in view, the release of March PCE price inflation data later on Friday tops the diary. Big Oil tops the earnings calendar.
Wall St stock futures fell back 0.4% after a wild ride in Amazon.com shares overnight.
The stock initially jumped more than 10% after decent bottom-line earnings were released. But it reversed all of that after Chief Financial Officer Brian Olsavsky signaled its long lofty cloud computing growth would slow further as its business customers braced for turbulence.
Amazon was down about 2.5% ahead of Friday’s open.
Intel attempted to keep tech appetite alive, however, and its shares rose 4% in out-of-hours trading after it flagged a second-half improvement in depressed gross margins.
Banking remained jittery. U.S. officials are coordinating urgent talks to rescue First Republic Bank as private-sector efforts led by the bank’s advisers have yet to reach a deal, according to Reuters sources.
With much of Europe and Asia closed on Monday for the May Day bank holiday, Asia bourses advanced in Wall St’s slipstream but Europe retreated sharply on some jarring corporate updates.
The biggest European laggards in percentage terms were UK lender Natwest, which fell nearly 6% after reporting large deposit outflows in the first quarter, and Spain’s Banco Sabadell, which dropped 5.7% for similar reasons.
In deals, Deutsche Bank said on Friday it had agreed to buy London-based stockbroker Numis for about 410 million pounds ($511 million) – an all-cash offer representing a premium of 72% to Numis stock’s Thursday close.
