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Nikkei climbs on Yen weakness; Oil poised for weekly gain
The Nikkei 225 advanced as a weak yen lifted exporters, while Tokyo inflation hinted at possible rate hikes. Oil steadied on China's stimulus bets and inventory declines, despite broader stagnation in crude prices.
Nikkei rises on weaker Yen
The Nikkei 225 climbed over 1% on Friday, buoyed by a weaker yen that lifted exporter stocks. Japan’s currency saw a mild rebound after Finance Minister Shunichi Suzuki reiterated the government’s readiness to counter excessive currency moves. US stock futures edged lower, while European contracts gained as markets reopened after the holiday break.
Across Asia, China and Hong Kong equities were poised for weekly advances, driven by expectations of increased fiscal spending in 2025. In contrast, South Korea’s KOSPI extended losses as political instability weighed on sentiment.
Inflation concerns also dominated in Japan, where Tokyo’s December consumer prices accelerated further, adding pressure on the Bank of Japan. Meeting minutes revealed that BOJ policymakers actively debated a potential rate hike, with January emerging as a possible timeline for action.
Oil eyes weekly gain amid China stimulus bets
WTI crude held around $69.60 per barrel, on track for a modest weekly gain as traders digested light year-end volumes. Sentiment improved after China unveiled additional fiscal measures, including plans to deploy government bond proceeds more flexibly to stimulate growth.
In the US, API data pointed to a fifth straight weekly drop in crude inventories, adding further support to oil prices ahead of official data. Meanwhile, the World Bank raised its growth forecasts for China for 2024 and 2025, although it cautioned about lingering property sector challenges and fragile confidence.
Separately, reports highlighted a pivot by major European energy companies toward prioritizing oil and gas projects over renewables, seeking short-term profit in an uncertain market. Oil prices have remained largely stagnant since mid-October and are on course for an annual decline of nearly 3%.
