Daijiworld Media Network - Tokyo
Tokyo, Jan 16: Asian stock markets advanced on Friday as optimism around artificial intelligence-driven growth regained momentum, while the US dollar hovered near a six-week high after strong American economic data prompted investors to scale back expectations of early interest rate cuts by the Federal Reserve.
MSCI’s broadest index of Asia-Pacific shares outside Japan touched a record high, buoyed by stellar results from Taiwanese chipmaker TSMC, which reignited confidence in the global AI trade. Technology-heavy indices in Taiwan and South Korea also hit all-time peaks during the session.
Investor sentiment was further lifted after the US and Taiwan clinched a trade deal that lowers tariffs on several semiconductor exports, encourages fresh investments into the US technology sector and strengthens supply-chain cooperation, despite concerns it could strain ties with China.
Overnight gains in technology and financial stocks pushed Wall Street higher, with Nasdaq futures rising during Asian trade, alongside modest gains in S&P 500 futures.
Market analysts said TSMC’s upbeat outlook offered much-needed reassurance to AI-related stocks that had struggled in recent months. While the rally was measured, it helped restore confidence that long-term investment in artificial intelligence remains on track.
In contrast, Japan’s Nikkei edged lower, weighed down partly by a modest recovery in the yen from recent multi-month lows. European stock futures also slipped slightly after shares on the continent scaled record highs in the previous session.
Chinese equities declined and were on course to snap a four-week winning streak, as regulators tightened margin financing rules. The CSI300 index traded lower amid cautious sentiment.
In currency markets, the yen drew attention after Japan’s finance minister said Tokyo would not rule out any measures, including coordinated intervention with the US, to curb excessive foreign exchange volatility. The yen strengthened modestly, extending gains following reports that some Bank of Japan policymakers see scope for an earlier-than-expected interest rate hike.
Meanwhile, the dollar remained firm near recent highs after data showed US jobless claims unexpectedly fell, reinforcing signs of resilience in the labour market. The euro and pound traded near recent lows against the greenback, while the dollar index stayed close to its strongest level since early December.
Markets are now increasingly betting that the Federal Reserve will keep interest rates unchanged in April, with expectations of a cut pushed further into the year.
In commodities, oil prices extended losses after US President Donald Trump adopted a cautious stance on tensions involving Iran, easing fears of immediate military escalation and supply disruptions. Brent crude and US oil both traded lower following steep declines in the previous session. Gold and silver also eased as demand for safe-haven assets weakened.
Overall, global markets remained focused on AI-driven growth prospects, central bank policy signals and geopolitical developments, with volatility expected to persist in the near term.