Asian Equities Surge as Japan Nears Interest Rate Hike

Tokyo - Asian stocks extended their gains for the second consecutive week as technology shares rebounded, propelling Wall Street to record highs. Investors eagerly anticipate the Bank of Japan's (BOJ) crucial policy decision on Friday, with market expectations of an interest rate hike.

Market Roundup

* Asian stocks rose, with key indices advancing in Hong Kong, Sydney, and Seoul.
* Japanese shares extended their rally to a fifth day, while the yen experienced a slight decline ahead of the BOJ announcement.
* S&P 500 futures remained stable after tech stocks pushed the index above the 6,100 milestone.
* Chinese stocks surged following President Trump's comments on avoiding tariff escalation against China.
* The Chinese yuan and Australian dollar strengthened, while the US dollar weakened.
* Oil prices fell for the sixth consecutive day.

Bank of Japan in Focus

Market participants are closely watching the BOJ, which is widely expected to increase its benchmark interest rate by 25 basis points, marking the most significant hike in 18 years. Governor Kazuo Ueda and his board are likely to raise the overnight call rate to 0.5%, reflecting increased confidence in the sustainability of inflation as Japan progresses toward monetary policy normalization.

US Federal Reserve Outlook

In the US, there is cautious optimism that the Trump administration may balance measures to stimulate economic growth and stock markets without exacerbating inflation pressures. This could potentially allow the Federal Reserve to continue monetary easing throughout 2023.

Key Events

* Friday: Bank of Japan policy meeting
* Friday: Eurozone HCOB Manufacturing & Services PMI
* Friday: US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI

Market Watch

Stocks

* S&P 500 futures: Little change
* Japan's Topix: +0.6%
* Australia's S&P/ASX 200: +0.4%
* Hong Kong's Hang Seng: +1.3%
* Shanghai Composite: +0.3%
* Euro Stoxx 50 futures: +0.3%

Currencies

* Bloomberg Dollar Spot Index: -0.2%
* Euro: +0.2% to $1.0435
* Japanese yen: -0.1% to 156.23 per dollar
* Offshore yuan: +0.2% to 7.2696 per dollar

Cryptocurrencies

* Bitcoin: +0.1% to $103,282.51
* Ether: +1.6% to $3,302.61

Commodities

* West Texas Intermediate crude: -0.2% to $74.47 a barrel
* Spot gold: +0.5% to $2,769.82 an ounce