Asian Markets Edge Higher as Investors Steady After Volatile Week on Wall Street

BY EMMANUEL OGBONNA

Asian stock markets and U.S. futures posted modest gains on Friday, signaling a tentative return of calm after several turbulent sessions driven by shifting policy signals from Washington and uncertainty over global interest rates.

In Japan, the Nikkei 225 index rose 0.3% to 53,846.87 after the Bank of Japan left its key policy interest rate unchanged, a decision that had been widely anticipated by investors. The central bank raised its benchmark rate to 0.75% in December, marking another step away from years of ultra-loose monetary policy. At the conclusion of its latest policy meeting, officials also slightly upgraded their outlook for inflation and economic growth, reinforcing expectations that further tightening could be on the horizon.

The Japanese yen weakened following the decision, sliding to 158.89 against the U.S. dollar from 158.42 earlier. Analysts said the currency’s move reflected market expectations that interest rate increases in Japan will remain gradual compared with those in other major economies.

“With underlying inflation pressures still firm, we expect the Bank of Japan to resume its tightening cycle in the coming months,” said Abhijit Surya of Capital Economics in a research note.

Chinese markets recorded moderate advances, tracking the broader regional trend. Hong Kong’s Hang Seng index added 0.3% to 26,720.55, while the Shanghai Composite Index also climbed 0.3% to 4,136.16, as investors weighed signs of policy support against lingering concerns about economic momentum.

South Korea’s Kospi rose 0.8% to 4,990.07, a day after briefly topping the 5,000 mark for the first time before retreating later in the session. In Australia, the S&P/ASX 200 edged 0.1% higher to 8,862.20. Taiwan’s Taiex advanced 0.7%, while India’s Sensex slipped 0.4%, bucking the generally positive regional tone.

Overnight in the United States, stocks extended their rebound after a sharp sell-off earlier in the week. The S&P 500 climbed 0.5% to 6,913.35, adding to gains after President Donald Trump announced he was scrapping proposed tariffs on European countries that he had accused of opposing U.S. control over Greenland. The Dow Jones Industrial Average rose 0.6% to 49,384.01, and the Nasdaq composite advanced 0.9% to 23,436.02.

Investors remained cautious, however, as details of the Greenland-related arrangement Trump said he had reached with the head of NATO remained unclear and no formal agreement had been signed. The episode marked the latest instance in which the president issued a forceful initial threat, only to reverse course after markets reacted sharply. The pattern has reinforced perceptions among some traders that market volatility itself can influence White House policy decisions.

Tuesday’s steep drop in U.S. stocks — the worst since October — was significant enough that Trump publicly acknowledged the market “dip,” a notable move for a president who often highlights gains on Wall Street.

Shares of JPMorgan Chase rose 0.5% after Trump filed a lawsuit accusing the bank of closing his accounts for political reasons following his departure from office in 2021. The legal action caused only limited ripples for the broader financial sector.

In the bond market, U.S. Treasury yields were relatively stable, suggesting foreign investors were not rushing to pull money out of American government debt. Yields were supported by a series of economic reports that painted a picture of continued resilience in the U.S. economy. Weekly data showed fewer Americans filing for unemployment benefits than economists had expected, a potential sign that layoffs remain limited. Revised figures also indicated that U.S. economic growth during the summer was stronger than previously estimated.

Additional data showed inflation in November largely matched forecasts, while consumer spending came in slightly above expectations, reinforcing the view that household demand remains a key driver of growth.

Global markets have also been reassured by easing pressure in Japan’s government bond market. Earlier in the week, long-term Japanese bond yields surged on concerns that Prime Minister Sanae Takaichi could pursue policies that would significantly expand government borrowing. The yield on the 40-year Japanese government bond, which briefly topped 4%, retreated to around 3.94% early Friday.

In commodities trading, gold rose 0.9%, hovering near the $5,000-per-ounce level, while silver jumped 2.7%. Precious metals often benefit during periods of uncertainty as investors seek perceived safe havens. Oil prices also edged higher, with U.S. benchmark crude gaining 39 cents to $59.75 per barrel and Brent crude rising 38 cents to $64.44 per barrel.

In currency markets, the euro slipped to $1.1738 from $1.1755, while the dollar held firm against most major counterparts, reflecting lingering caution as investors continue to assess the balance between economic resilience and political risk.