Stronger Tokyo CPI Leads to Yen Strength – Asia Market Wrap

The yen rose Friday as Tokyo’s inflation report topped expectations. Asian stocks gained. Chinese shares rose on rumours that Beijing may provide additional economic support at a major policy meeting in December. The country has extended tax exemptions on certain American products, signalling that it is less willing to take a harsh position in the face of US trade concerns. The US markets were closed on Thursday for the Thanksgiving holiday.

Australian and Japanese stocks slumped, while South Korean stocks plummeted the most in the region, as the central bank’s surprise interest-rate cut moved investor attention to weakening economic development. MSCI’s regional equities index increased 0.5% on Friday, but was on course for its second consecutive monthly loss.

The yen surged to its highest level in almost a month against the dollar, surpassing 150. The dollar fell against major currencies, with a greenback strength index set for its first weekly fall in two months. Treasury yields decreased when cash trade in Asia resumed.

The moves highlighted the global market’s reduced appetite for risk during a week known for low volumes owing to the US holiday. Month-end positioning may also encourage some investors to rebalance portfolios following a record high in American stocks this week. US equities futures rose.