Japan’s Nikkei at 2-month high amid signs of slower US rate hike

Electron jumped 8.43% and provided the biggest boost to the Nikkei, despite cutting its annual profit forecast. Peer Advantest climbed 9.06%.

“Investors made a bet on Tokyo Electron, which disclosed weak outlook. This is a typical example that investors are looking for something beyond the ongoing business year.”

Uniqlo brand owner Fast Retailing rose 1.96% and air-conditioner maker Daikin Industries climbed 7.19%. Bucking the trend, Nikon tanked 8.85% to become the biggest loser in the Nikkei after the camera maker posted a lower half-year net profit.

China’s yuan hit a seven-week high against the dollar on Friday, as investors cheered the Chinese government’s decision to ease some of the country’s strict COVID-19 prevention controls.

The rise in the Chinese yuan also came as the dollar languished after cooler-than-expected US inflation data fuelled market expectations for a slower pace of Federal Reserve rate hikes.

Chinese health authorities on Friday eased some of the country’s heavy COVID-19 curbs, including shortening by two days quarantine times for close contacts of cases and inbound travellers, and eliminating a penalty on airlines for bringing in infected passengers.

“It looks like the two game changers

coming together,” said Ken

Japan’s Nikkei index ended at a two-month high on Friday, led by Tokyo Electron and other growth stocks, as markets tracked Wall Street higher after signs of cooling inflation fuelled hopes the US central bank might slow pace of its interest rate hike.

The Nikkei jumped 2.98% to end at 28,263.57, its highest close since Sept. 13. The index gained 3.91% this week and marked a third straight weekly gain.

The broader Topix climbed nearly 2.12% to 1,977.76 and rose 3.26% for the week. US stocks jumped overnight as cooler-than-expected inflation data suggested the Federal Reserve’s barrage of interest rate hikes are beginning to have their intended effect.

All three major US stock indexes notched their biggest one-day percentage gains in about 2-1/2 years in a broad, robust rally.

“The fact that the growth rate of US inflation was lower than expectations had boosted Wall Street, and that raised sentiment for Japanese market,” said Takatoshi Itoshima, strategist at Pictet Asset Management Japan.

Japanese shares fall on sell-off after disappointing forecasts by heavyweights

Chip equipment maker Tokyo

Cheung, chief Asian FX strategist at Mizuho Bank. “Investors are squeezing their short yuan positions,” he added, seeing further upside room for the yuan to head to 7.05 per dollar.

Yuan slips as weak inflation fans growth concerns

The onshore yuan jumped as high as 7.0650 per dollar, the strongest level since Sept. 22, before last trading at 7.0957 as 0622 GMT.

Its offshore counterpart rose to 7.0592 per dollar, its highest level since Oct. 6.

It traded at 7.0850 as of 0622 GMT. Persistent COVID-19 disruptions, stringent prevention measures and mobility restrictions have piled pressure on the world’s second-largest economy, with the International Monetary Fund in October cutting China’s full-year growth forecast to 3.2% from 4.4% previously.

Prior to market opening, the People’s Bank of China (PBOC) set the midpoint rate at 7.1907 per dollar, the highest since Oct.31.

That represented a 0.7% rise on the previous fix of 7.2422, the biggest oneday jump in the official rate guidance in nearly six months.

Traders and analysts said the official midpoint largely matched their projections, reflecting the broad dollar weakness in global markets. Friday’s fixing was 17 pips weaker than Reuters’ estimate of 7.1890.