Asian stocks wobbled at the open Friday as the sharp rebound in global equities over the past week showed signs of losing momentum.
Indexes opened lower in South Korea and Japan, while Australia edged higher as equities struggled for direction following the US Thanksgiving holiday. A gauge of global stocks was flat, but remained on course for its best week since June as investors cheered signs of Federal Reserve interest-rate cuts.
Chinese stocks will be in focus after JPMorgan Chase & Co. raised its recommendation to “overweight,” stating that the prospect of large advances next year outweighs the risk of significant losses.
Global stocks have gained this week as investors firm up bets on a Fed easing, with futures pricing in roughly an 80% chance of a quarter-point cut next month and leaning toward three more by the end of 2026. Equities have now almost erased their November losses after concerns over frothy AI valuations triggered a selloff earlier in the month.
The rally in equity markets is likely to broaden outside the US, said Goldman Sachs Group Inc. strategist Peter Oppenheimer in an interview on Bloomberg TV. He anticipated further Fed easing but added that there is limited upside for stocks overall “because valuations are reasonably high.”
Meanwhile, the yen was little changed against the dollar after Tokyo’s inflation held steady in November, keeping the Bank of Japan on track for an interest-rate hike in coming months.
The data, a leading indicator for national price trends, are likely to instill confidence in the BOJ that the probability of its economic outlook being realized is rising. The figures may give traders’ bets on a December interest rate-hike another boost after such speculation mounted recently.
In other corners of the market, oil headed for the longest run of monthly losses in more than two years, as traders looked ahead to an OPEC+ meeting this weekend and gauged US-led efforts to end the conflict in Ukraine.
Cash trading resumed in Treasuries Friday with the yield on the benchmark 10-year rising more than one basis point to 4.01%.
A rally in Treasuries cooled on Wednesday, with the 10-year yield at 4%, as fresh US labor market data came in stronger than expected.
Treasuries had gained since last week after delayed September jobs data painted a mixed picture. They then picked up steam on Friday after New York Fed President John Williams signaled he sees room for a rate reduction “in the near term” due to labor market softness.
Also in the spotlight Friday are Chinese property developers.
China Vanke Co. was rejected by at least two large local banks as it tried to secure a short-term loan to quell the default fears that have fueled a plunge in its bonds this week, according to people familiar with the matter.
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