Asian Stocks Rise as Investors Focus on Central Bank Speeches

Introduction

Asian stocks made gains, propelled by a pause in interest rate hikes by the Federal Reserve and anticipation of key speeches by central bank officials in the region.

Market Performance

The MSCI Asia Pacific Index advanced by approximately 0.2%, supported by gains in Japanese shares. Liquidity remained modest as several major equity markets, including Hong Kong, mainland China, and South Korea, were closed for the Lunar New Year holiday.

Federal Reserve Decision

The Fed's decision to maintain interest rates was widely anticipated. However, earnings reports from tech giants such as IBM, Meta, Microsoft, and Tesla yielded mixed results, providing limited guidance for stocks.

Central Bank Speeches

Investors are closely monitoring a speech by Bank of Japan Deputy Governor Ryozo Himino later today. The Bank of Japan recently raised rates, and traders believe the Fed's signaling of a gradual approach could embolden Himino to adopt a more hawkish stance.

Currency Markets

The yen strengthened by up to 0.5% against the dollar, while other Asian currencies also appreciated, with a Bloomberg index rising by 0.2%.

Reserve Bank of Australia

Reserve Bank of Australia Assistant Governor Brad Jones is scheduled to speak today following the release of subdued inflation data. Markets have increased expectations for a rate cut next month but have not fully priced in a 25 basis point reduction.

SoftBank Investment

Shares of SoftBank Group Corp. initially declined by 2% but recovered half their losses after a report that the company is considering a $25 billion investment in OpenAI, a developer of artificial intelligence technology.

US Markets and Economic Data

US futures pointed to a reversal of Wednesday's modest declines in major indexes. Investors anticipate earnings from Apple Inc. later today. The Philippine economy recorded slower growth than expected in the fourth quarter, weighing on local stocks.

Commodities

Oil prices stabilized as traders awaited clarity on US trade policy after comments from the Commerce Secretary nominee suggested potential relief for Canada and Mexico from import tariffs.