FX.co ★ Asian Markets Trade Mixed

Asian stock markets exhibited mixed performances on Friday, influenced by diverse signals from Wall Street after June’s subdued US inflation data heightened the likelihood of an interest rate cut by the US Federal Reserve as soon as its September meeting. Consequently, bond yields declined and the US dollar weakened across most regional currencies. Asian markets mostly ended higher on Thursday.

Data from CME Group’s FedWatch Tool indicate that the probability of a September rate cut has surged to 84.6%, up from 69.7% just two days prior.

Building on gains from the previous session, the Australian stock market showed significant advancement on Friday, driven by strong performances in the mining and technology sectors. The benchmark S&P/ASX 200 was trading well above the 7,900 level, boosted by widespread sector gains.

Specifically, the S&P/ASX 200 Index rose by 73.00 points or 0.93% to reach 7,962.60, after peaking at 7,969.10 earlier. The broader All Ordinaries Index also climbed 75.00 points or 0.92% to 8,208.40. Australian markets recorded considerable gains on Thursday as well.

Among major miners, Rio Tinto increased by nearly 1%, Fortescue Metals edged up by 0.5%, and Mineral Resources surged by more than 2%, while BHP Group saw a slight decline of 0.4%.

Oil stocks demonstrated mostly positive trends. Origin Energy, Beach Energy, and Santos saw increases ranging from 0.1% to 0.5%, while Woodside Energy gained nearly 1%.

In the tech sector, Afterpay owner Block and Appen each advanced by more than 3%, with Zip rising almost 2%. However, Xero declined by nearly 1%, and WiseTech Global dropped roughly 2%.

Among major banks, Commonwealth Bank, ANZ Banking, and Westpac each gained almost 1%, while National Australia Bank added almost 2%. Gold miners were mostly on the rise, with Evolution Mining up 2.5%, Gold Road Resources gaining over 2%, Northern Star Resources surging 3.5%, Resolute Mining soaring nearly 6%, and Newmont advancing nearly 3%.

In the currency market, the Australian dollar traded at $0.676 on Friday.

Meanwhile, the Japanese stock market experienced a sharp decline on Friday, reversing gains from the previous three sessions and following mixed cues from Wall Street. The benchmark Nikkei 225 Index dropped below the 41,400 level, plummeting by 2%, with significant losses across various sectors, particularly among index heavyweights, exporters, and technology stocks.

The Nikkei 225 closed the morning session at 41,388.92, down 835.10 points or 1.98%, after hitting a low of 41,188.29 earlier. Japanese stocks had closed significantly higher on Thursday.

Major market player SoftBank Group lost more than 3%, while Uniqlo operator Fast Retailing declined by nearly 4%. Within the automotive sector, Honda fell by almost 1%, and Toyota edged down by 0.3%.

In the tech space, Advantest dropped by nearly 5%, Tokyo Electron by more than 6%, and Screen Holdings by 4.5%.

In the banking sector, Sumitomo Mitsui Financial, Mizuho Financial, and Mitsubishi UFJ Financial each declined by more than 2%.

Among key exporters, Mitsubishi Electric fell by nearly 2%, Panasonic by almost 1%, Sony by more than 2%, and Canon by almost 3%.

Among other significant losers, Disco plummeted by nearly 8%, Seven & I Holdings by more than 7%, while Renesas Electronics and Dai-ichi Life Holdings fell by nearly 5% each. Tokio Marine and T&D Holdings each dropped by more than 4%, while Isetan Mitsukoshi, MS&AD Insurance, and Taiyo Yuden each decreased by around 4%. Takashimaya saw a decline of more than 3%.

Conversely, M3 and Nitori Holdings each gained more than 4%, while OKUMA added nearly 3%.

In the currency market, the US dollar traded in the lower 159 yen range on Friday.

Elsewhere in Asia, Hong Kong gained 2.0%, while New Zealand, China, Singapore, and Indonesia increased by between 0.1% and 0.5%, Taiwan plunged 2.1%, South Korea slipped 1.3%, and Malaysia fell 0.2%.

On Wall Street, stocks experienced a substantial downturn on Thursday. The tech-heavy Nasdaq fell by 364.04 points or 2.0% to 18,283.41, while the S&P 500 dropped by 49.37 points or 0.9% to 5,584.54. In contrast, the Dow Jones Industrial Average closed up 32.39 points or 0.1% at 39,753.85 after hovering near the unchanged line for most of the day.On the same day, major European markets experienced gains. The U.K.'s FTSE 100 Index increased by 0.4%, while both the French CAC 40 Index and the German DAX Index advanced by 0.7%.

Crude oil prices saw an uptick on Thursday, buoyed by the prospect of the Federal Reserve cutting interest rates following promising inflation data. West Texas Intermediate crude oil futures for August concluded the session at $82.62 a barrel, marking a $0.52 decrease.