And despite the economy’s stumble into recession late last year, the Bank of Japan is on track to end negative interest rates in coming months, according to Reuters sources, and only wages growth needs assessing before it acts.
The yen slipped back lower regardless, while the latest weekly data showed foreign investors can’t get enough of Japan – increasing purchases of Japanese stocks by a net 817.43 billion yen ($5.44 billion) in the biggest inflow since Jan. 12.
Back on Wall St, the hot/cold debate on the U.S. economic performance in 2024 on Thursday leaned heavily to the cooler side of things – not least as frigid weather during January depressed retail sales and industrial production.
Whether the cold snap masks the true strength of the U.S. economy is now an open question as jobless claims fell again and regional Fed surveys showed buoyant business sentiment nonetheless.
With Friday’s producer price report now top of the radar, bond markets are wary of a sticky surprise akin to the consumer price report earlier this week.
A combination of surging stocks, which saw the S&P500 climb back within 0.5% of record peaks again, and inflation worries has Treasury yields nudging higher again into today’s open.
And Fed officials are sounding wary despite the seemingly soft January economic readouts.
Atlanta Fed boss Raphael Bostic, who is pencilling in only two rate cuts this year, said the central bank was not ready yet to start easing.
“Right now, a strong labor market and macroeconomy offer the chance to execute these policy decisions without oppressive urgency,” he said, adding the economy may even have “pent-up exuberance” that could drive up demand again.
And there was no shortage of pent-up exuberance in some of the high octane parts of the tech sector that are increasingly enmeshed.
Shares of smaller AI firms rallied again on Thursday after the world’s most dominant artificial intelligence chipmaker Nvidia disclosed stakes in them, offering clues on its growth strategy.
The rally showed Nvidia’s growing influence in the AI world as its market value grows at a scorching pace, making it the third most-valuable U.S. company. Its largest investment of $147.3 million was in Arm Holdings, the chip designer that Nvidia failed to buy after an $80 billion deal hit the antitrust hurdle two years ago.
