Asian markets showed gains early Friday following a drop in U.S. Treasury yields, which had been volatile amid concerns over rising U.S. government debt.
The 10-year Treasury yield declined 0.6% to 4.52%, while the two-year yield, closely tied to Federal Reserve policy expectations, fell 0.4% to 3.98%.
Oil prices slipped as traders anticipated that OPEC+ might increase production at their upcoming meeting. U.S. crude fell 51 cents to $60.69 per barrel, and Brent crude also lost 51 cents, settling at $63.93 per barrel.
In equities, Tokyo’s Nikkei 225 rose 0.8% to 37,289.60 after Japan reported a core inflation rate of 3.5% in April, the highest since early 2023. This inflation surge raises the chances that the Bank of Japan will raise interest rates soon. However, analysts warn that U.S. tariffs under President Trump could limit the Bank’s actions due to economic uncertainty and weakness.
Other Asian indexes also advanced: Hong Kong’s Hang Seng increased 0.4% to 23,627.99, Shanghai Composite climbed 1% to 3,382.12, Seoul’s Kospi edged up 0.2% to 2,597.49, and Australia’s S&P/ASX 200 gained 0.4% to 8,379.10.
On Wall Street Thursday, markets closed mixed. The S&P 500 dipped less than 0.1% to 5,842.01, the Dow Jones fell slightly to 41,859.09, while the Nasdaq rose 0.3% to 18,925.73. Technology stocks led gains, with Alphabet up 1.4% and Nvidia rising 0.8%, offsetting losses in other sectors.
Treasury yields steadied after the U.S. House approved a multitrillion-dollar spending bill that extends tax breaks from President Trump’s first term and introduces others. The bill is expected to face amendments in the Senate.
The legislation also accelerates cuts to production tax credits for clean energy, causing sharp declines in solar stocks: Sunrun dropped 37.1%, Enphase Energy fell 19.6%, and First Solar slid 4.3%.
Healthcare shares also fell after the Centers for Medicare & Medicaid Services expanded audits of Medicare Advantage plans. UnitedHealth Group lost 2.1%, and Humana dropped 7.6%.
Economic data showed a slight decrease in weekly U.S. unemployment claims, with the overall job market remaining strong despite trade war concerns.
A report from S&P Global indicated growth in U.S. manufacturing and services in May, driven partly by businesses stockpiling ahead of potential July tariffs. However, the report noted the steepest rise in prices for goods and services since August 2022.
In currency markets, the U.S. dollar weakened against the yen, moving from 144.01 to 143.45, while the euro strengthened slightly to $1.1319 from $1.1279.
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