Asia stocks edge up ahead of Bank of Japan rate decision

SINGAPORE — Stocks made tepid gains in early Asian trading on Friday (Jan 23) ahead of the Bank of Japan's latest policy meeting, at which it is widely expected to keep rates on hold.

MSCI's broadest index of Asia-Pacific shares outside Japan was last up 0.4 per cent, while the Nikkei 225 edged 0.2 per cent higher. S&P 500 e-mini futures fluctuated between gains and losses, last trading up 0.1 per cent. 

Stocks on Wall Street on Thursday extended their rebound for a second day after US President Donald Trump walked back earlier threats of tariffs on European goods and ruled out taking control of Greenland by force.

The S&P 500 climbed 0.5 per cent and the Nasdaq Composite rallied 0.9 per cent. "Markets welcomed the shift, with a rebound in risk assets and a flattening of government bond yield curves," analysts from Societe Generale wrote in a research report. "Policy uncertainty remains high, however. Further twists and turns are likely."

The yen weakened 0.1 per cent to 158.54 against the dollar ahead of the BOJ meeting, following the release of government data earlier on Friday showing Japan's core consumer prices rose 2.4 per cent in December from a year earlier, in line with analysts' estimates.

The US dollar index, which measures the greenback's strength against a basket of six currencies, held steady at 98.329, meandering around its lowest levels of the year, after logging its biggest one-day fall in six weeks on Thursday.

Fed funds futures are pricing an implied 96 per cent probability that the US Federal Reserve will keep rates on hold at its next two-day meeting on Jan 28, little changed from a day earlier, according to the CME Group's FedWatch tool.

The yield on the US 10-year Treasury bond was last up 0.2 basis point at 4.247 per cent.

Precious metals markets set records as the dollar wallowed around the lows of the year. Gold rallied for a fifth day, gaining 0.3 per cent to US$4,951.47 (S$6,337.39) per ounce, while silver was up 1.7 per cent at US$97.85 per ounce.

Korean stocks led gains in Asia, with the Kospi up for a third day by 1.1 per cent after crossing the 5,000 mark for the first time on Thursday, a milestone President Lee Jae-myung had promised to reach through market reforms and tax measures to close the so-called "Korea discount".

The gains for the tech-heavy index, anchored by chipmaker Samsung Electronics, came after Intel on Thursday forecast quarterly revenue and profit below market estimates as it struggled to satisfy demand for server chips used in AI data centres, sending shares down 11 per cent in after-hours trading. 

In energy markets, Brent crude futures <LCOc1> were last up 0.4 per cent at US$64.30 a barrel, steadying after Trump's softer tone towards Greenland and Iran eased fears of geopolitical risks disrupting supply. Bitcoin was last up 0.3 per cent at US$89,499.47, while ether nudged 0.2 per cent higher to US$2,948.14.

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