On Friday, the Asia-Pacific stock markets followed the overnight gains in the U.S. stock market, with the Nikkei 225 index rising over 1% and the MSCI Asia-Pacific index up 0.6%. U.S. stock futures were mixed, with Dow futures down 0.26% and Nasdaq 100 futures up 0.1%. The cooling U.S. inflation data strengthened expectations for a Federal Reserve rate cut, leading to a 0.8% increase in the S&amp;P 500 index on Thursday and a 1.5% rise in the Nasdaq 100 index, boosting market sentiment.
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The Bank of Japan announced a 25 basis point interest rate hike, raising the benchmark rate to its highest level in 30 years, and hinted at continuing to tighten monetary policy if conditions allow, pushing Japan's 10-year government bond yield to 2% for the first time since 2006, with 30-year and 40-year Japanese bond yields also rising. However, the yen fell against all G10 currencies, as the market believes the central bank's pace of rate hikes will remain cautious.
The commodities market faced pressure on Friday. Spot gold fell 0.1% to below $4,330 due to the slowdown in U.S. inflation and a stronger dollar. Platinum and palladium both retreated after significant gains on Thursday. Silver rose 0.4%, approaching $66. Oversupply continued to suppress oil prices, with both Brent crude and U.S. WTI crude declining.
Core market trends:
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S&amp;P 500 index futures were basically flat, while Nasdaq 100 index futures rose 0.1%;
The Nikkei 225 index rose 1.25%, and the Tokyo Stock Exchange index rose 0.7%; Australia's S&amp;P/ASX 200 index rose 0.5%;
The Euro Stoxx 50 index futures fell 0.3%;
The dollar index was basically flat; the yen fell 0.3% to 155.92 yen per dollar;
The yield on 10-year U.S. Treasury bonds rose two basis points to 4.14%;
The yield on 10-year Japanese government bonds rose three basis points to 2.000%; the yield on 30-year Japanese government bonds rose four basis points to 3.415%; the yield on 40-year Japanese government bonds rose 3.5 basis points to 3.71%;
The yield on 10-year Australian government bonds rose two basis points to 4.76%;
U.S. WTI crude futures fell 0.3% to $55.81 per barrel; Brent crude fell 0.3% to $59.32 per barrel;
Spot gold fell 0.1% to $4,328.08 per ounce; spot silver rose 0.7% to $65.97 per ounce;
Bitcoin rose 1.6% to $86,994.64; Ethereum rose 3.3% to $2,920.9.
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<h2>U.S. Inflation Cooling Boosts Market</h2>
The Asia-Pacific stock markets rose across the board today, with technology giants like SoftBank Group and Tencent Holdings being the biggest contributors to the Asia-Pacific stock market. The overnight rise in U.S. stocks, driven by cooling inflation data that boosted expectations for a Federal Reserve rate cut and improved market sentiment, was further supported by a rebound in tech stocks, driven by strong prospects from chip giant Micron Technology, alleviating market concerns over artificial intelligence spending and valuations
According to a previous article from Wall Street Insight, the U.S. consumer prices in November rose by 2.7% year-on-year, lower than the 3.1% predicted by economists in a Reuters survey, marking the lowest growth rate since early 2021. This data boosted investor confidence and supported U.S. Treasury bonds amid rising expectations for a Federal Reserve interest rate cut.
Chris Zaccarelli, Chief Investment Officer of Northlight Asset Management, stated:
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&#34;Given the significant slowdown in inflation month-on-month, there is clearly room for further rate cuts to support the labor market. If the doves prevail, stock prices may be supported and rise as the Federal Reserve continues to cut rates while the economy continues to grow.&#34;
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However, it is worth noting that the slowdown in inflation is accompanied by data issues. Due to a temporary government shutdown, the U.S. Bureau of Labor Statistics was unable to collect price data throughout October, and the sampling for November started later than usual.
Krishna Guha, an economist at Evercore ISI, remarked:
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&#34;On the surface, the November CPI data is very mild, providing ammunition for the Fed's doves. But the unexpected magnitude is so large, especially in terms of housing services inflation, that the committee will be very vigilant about the technical challenges and judgments related to the shutdown that may have severely distorted the situation.&#34;
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<h2>Bank of Japan's Rate Hike Cycle Continues, Yen Falls, and Japanese Bond Yields Rise</h2>
According to an article from Wall Street Insight, on Friday, Bank of Japan Governor Kazuo Ueda and his monetary policy committee unanimously agreed to raise interest rates by 25 basis points to 0.75%. Despite the rate hike on Friday, Japan's benchmark interest rate remains well below the inflation rate.
In Friday's statement, policymakers noted that the likelihood of achieving their economic forecasts is increasing. The Bank of Japan clearly stated that it would continue to raise borrowing costs if the expected economic outlook materializes, emphasizing that potential inflation continues to rise moderately.
Harumi Taguchi, an economist at S&amp;P Global Market Intelligence, stated: &#34;I think this rate hike should have been done a long time ago.&#34; She added, &#34;The Bank of Japan's statement indicates that its position has not changed: if the economic and price conditions develop as expected, it will continue to raise rates. This means there is a high likelihood of further rate hikes.&#34;
Following the statement, the yen weakened against the dollar, hitting a low of 156.16, and has now returned to around the 156 mark, indicating that the rate hike has been fully digested by the market.
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Felix Ryan, a strategist at ANZ Group in Sydney, stated:
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&#34;We see the dollar rising against the yen, which may indicate that the market has not yet seen clear signs of the pace or scope of the Bank of Japan's rate hikes. We believe that due to the unfavorable interest rate differential, the yen will continue to lag in G10 currency crosses over the next year
&#34;After the decision was announced, Japanese government bonds fell, with the benchmark 10-year government bond yield rising above 2% for the first time since 2006. The Nikkei 225 index rose 0.9% at the close.
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<h2>Commodities under pressure: Gold and crude oil decline, silver rises</h2>
Gold fell 0.1% to below $4,330 on Friday due to U.S. inflation data coming in lower than expected, reducing gold's appeal as an inflation hedge, while a stronger dollar also put pressure on prices. However, gold still rose 0.4% this week.
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(Current spot gold 1H chart)
Spot silver rose 0.4%, approaching $66, with a weekly increase of 5%, after reaching a historical high of $66.88 on Wednesday. Silver has risen 125% year-to-date, outperforming gold's 65% increase.
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(Current spot silver 1H chart)
Tim Waterer, Chief Market Analyst at KCM Trade, stated:
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&#34;The relatively mild inflation data is somewhat of a double-edged sword for gold and silver; it helps justify the Fed's dovish trajectory, but it also means their appeal as inflation hedges has diminished. A stabilizing dollar has also created some resistance.&#34;
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Spot platinum rose 0.5% to around $1,925, reaching a more than 17-year high on Thursday. Palladium fell 1.1% to $1,677.68, having reached a nearly three-year high on Thursday. Both recorded weekly gains.
Crude oil fell for the second consecutive week, despite tensions arising from the U.S. imposing a maritime blockade on sanctioned tankers from Venezuela, as expectations of a global supply surplus pressured oil prices. Brent crude fell more than 2% this week

The Bank of Japan raised its benchmark interest rate to the highest level in 30 years, suggesting that it will continue to tighten monetary policy if conditions allow, pushing Japan's 10-year government bond yield to 2% for the first time since 2006. However, the yen fell against all G10 currencies, as the market believes the central bank's pace of rate hikes will remain cautious. The cooling of U.S. inflation data has strengthened expectations for a Federal Reserve rate cut, and Asia-Pacific stock markets followed the overnight gains in U.S. stocks

Wallstreetcn

The Bank of Japan raised interest rates as scheduled! The 10-year Japanese government bond yield broke above 2%, reaching a new high since 2006. The yen plummeted, Asian Pacific stock markets rose broadly, Nasdaq futures edged up, and gold fell back to $4,330