Yen Gains, Record Stock Rally Cools Following BoJ Move – Asia Market Wrap

A  record-breaking global stock rally hit a speed bump after the BoJ’s decision to begin selling its massive exchange-traded fund holdings dragged Asian shares lower.

The MSCI Asia Pacific Index slipped 0.4% while the Nikkei-225 Stock Average dropped about 0.7%. Asian shares had opened higher after four key US equity benchmarks closed at all-time highs in unison for the first time since November 2021. Gold gained and Treasuries inched lower. Equity-index futures for US and Europe also edged down.

Japanese stocks reversed earlier gains after the BoJ unveiled a plan to sell ETFs at a scale similar to the disposal of stocks bought from banks in the 2000s. The central bank kept its policy rate at 0.5%, as expected, after a 7-2 vote. The yen rose 0.3% against the Dollar and the nation’s two-year bond yields climbed to the highest since 2008.

Concern has been mounting for weeks that the S&P 500’s push to record after record risks becoming a bubble, with the index’s swollen valuation often cited as a cause for concern.

Investors will also be focusing on a phone call between Trump and his Chinese counterpart Xi later Friday. The conversation promises to determine the fate of TikTok – and potentially ease trade tensions between the world’s two biggest economies.