FX.co ★ Asian Shares Rise Ahead Of US Inflation Reading

Asian stocks advanced on Friday, while the dollar remained near two-month highs and Treasury yields declined as traders awaited a crucial U.S. inflation report that could impact the Federal Reserve's timing on interest rate reductions.

In Asian markets, gold prices saw a slight dip, whereas oil prices extended their gains for a third consecutive day and appeared set for a third straight weekly increase. This was due to rising tensions in the Middle East, heightening concerns over potential global supply disruptions.

China's Shanghai Composite index increased by 0.73%, reaching 2,967.40, ahead of the key purchasing managers index data release expected over the weekend. Similarly, Hong Kong's Hang Seng index edged up slightly, closing at 17,718.61.

Japanese markets also saw a notable rise, partially reversing losses from the previous session. The Nikkei average climbed by 0.61% to 39,583.08 following a series of data points: inflation in Tokyo increased in June, industrial output rose more than anticipated in May, and the unemployment rate for May remained steady at 2.6%. The broader Topix index ended 0.57% higher at 2,809.63, achieving a 34-year high driven by gains in the technology sector.

The yen weakened against the dollar, hitting 161.27, its lowest point since 1986, ahead of the U.S. personal consumption expenditures price index release.

In South Korea, despite a drop in industrial output in May due to ongoing declines in consumption and investment, Seoul stocks finished higher. The Kospi average rose by 0.49% to 2,797.82.

Australian markets experienced modest gains, bolstered by rising bullion prices that supported gold mining stocks. The benchmark S&P/ASX 200 edged up by 0.10% to 7,767.50, while the broader All Ordinaries index increased by 0.14% to 8,013.80. Suncorp shares rose by 3.6% following approval from Federal Treasurer Jim Chalmers for ANZ to acquire its banking division. Nine Entertainment saw a 1.1% rise after announcing it would cut up to 200 jobs to address ongoing issues.

Markets in New Zealand were closed due to a public holiday. Meanwhile, U.S. stocks showed fluctuations but ended modestly higher despite a decline in key semiconductor stocks, affected by disappointing projections from Micron Technology.

U.S. Q1 GDP growth was revised upward to 1.4%, in line with expectations. Additionally, jobless claims dropped last week, and durable goods orders unexpectedly rose in May, although the growth rate slowed compared to the previous month, according to separate data releases.

The Dow Jones Industrial Average and the S&P 500 both ended largely flat with a slight positive bias, while the tech-heavy Nasdaq Composite gained 0.3%.