(Bloomberg) — Asian stocks traded in narrow ranges after US shares fell from record highs as a disappointing forecast from the world’s largest retailer added to concern about the health of the economy. The yen strengthened past 150 per dollar.
Australian shares edged higher while those in Japan ticked down due to the stronger local currency. Equity index futures pointed to initial gains in Hong Kong after a gauge of US-listed Chinese shares climbed as Alibaba Group Holding Ltd. announced its fastest pace of revenue growth in more than a year.
Investors in Asia will be closely watching for a rebound in Chinese shares after losses on Thursday. Asian stocks have gained 2.5% this month, outperforming a gauge of global peers as enthusiasm over China’s DeepSeek AI lures money into the technology sector.
“We see a modest ‘sell US risk’ flow expressed through markets, with traders compelled by the momentum seen in China and HK,” said Chris Weston, head of research at Pepperstone Group in Melbourne. Alibaba’s strong earnings “more than justifies the recent migration of capital from a concentrated US tech position toward the China AI plays.”
The yen appreciated past the key level of 150 late Thursday to the strongest since December on speculation the Bank of Japan will hike interest rates sooner rather than later. Traders are pricing in a roughly 84% chance of a 25 basis point hike at the July meeting, up from a 70% chance at the start of the month, according to data compiled by Bloomberg.
Japan’s inflation accelerated more than expected, data showed Friday. Consumer prices excluding fresh food rose 3.2% from a year earlier in January, the biggest gain since June 2023, according to the ministry of internal affairs. The currency was little changed in Friday trading at about 149.84.
“The CPI prints, alongside the recent Q4 GDP and December wage data, justified the recent lift in BOJ rate hike pricing,” said Carol Kong, a strategist at Commonwealth Bank of Australia. “USD/JPY can reach our end-March forecast of 149 sooner than expected.”
The S&P 500 slipped 0.4% Thursday as Walmart shares fell — the first big-box retailer to report results after the holiday season. Its chief financial officer acknowledged “uncertainties related to consumer behavior and global economic and geopolitical conditions.” That’s just days after retail sales signaled an abrupt pullback by consumers. A slide in banks also weighed on trading, with JPMorgan Chase & Co. and Goldman Sachs Group Inc. each falling over 3.8%.
Retailers like Walmart tend to perform well during tough economic times. It’s also true that Walmart usually starts the year with a conservative guidance. But the fact is consumers are dealing with stubborn prices and high borrowing costs, and many are turning to credit cards and other debt to support their spending — with a rising number of those loans starting to go bad.
Elsewhere, Treasuries were little changed in early Asian trading after 10-year yields fell three basis points to 4.51% in New York. Treasury Secretary Scott Bessent said that any move to boost the share of longer-term Treasuries in government debt issuance is some ways off given current hurdles that include elevated inflation and the Federal Reserve’s quantitative tightening program.
In Australia, the central bank is closely monitoring the state of the labor market as persistent tightness may signal a stronger economy, Governor Michele Bullock said, adding that policymakers aren’t “pre-committed” to any path for interest rates.
In commodities, oil headed for its biggest weekly gain since early January on increasing supply uncertainty. Gold was steady after reaching a fresh record.
Key events this week:
- Eurozone HCOB manufacturing & services PMI, Friday
- US S&P Global manufacturing & services PMI, existing home sales, consumer sentiment, Friday
Some of the main moves in markets:
Stocks
- S&P 500 futures were little changed as of 9:34 a.m. Tokyo time
- Hang Seng futures rose 2%
- Japan’s Topix was little changed
- Australia’s S&P/ASX 200 rose 0.1%
- Euro Stoxx 50 futures were little changed
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0494
- The Japanese yen fell 0.2% to 149.88 per dollar
- The offshore yuan fell 0.1% to 7.2437 per dollar
Cryptocurrencies
- Bitcoin rose 0.3% to $98,388.15
- Ether rose 0.5% to $2,742.35
Bonds
- The yield on 10-year Treasuries was little changed at 4.51%
- Australia’s 10-year yield was little changed at 4.53%
Commodities
- West Texas Intermediate crude rose 0.3% to $72.68 a barrel
- Spot gold was little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess.
©2025 Bloomberg L.P.
