Asia Pacific stocks were mostly up Friday morning, with investors unwinding some of the reflation trades that have marked 2021 to date.
Japan’s Nikkei 225 was up 0.31% by 10:22 PM ET (2:22 AM GMT), with the Bank of Japan (BOJ) due to hand down its policy decision later in the day.
BOJ is widely expected to keep its massive stimulus firmly in place and could extend the deadline for its COVID-19-relief program in its decision. They both indicate that the country's fragile economic recovery and tepid inflation mean any exit from the current ultra-easy policy remains a long way off.
Data released earlier in the day also said that Japan’s national core consumer price index grew 0.1% year-on-year, in line with forecasts prepared by Investing.com and higher than the 0.1% contraction recorded in April.
South Korea’s KOSPI edged up 0.17% and in Australia, the ASX 200 was up 0.42%.
Hong Kong’s Hang Seng Index rose 0.76%.
China’s Shanghai Composite inched up 0.10% while the Shenzhen Component gained 0.69%. The Federal Communications Commission voted 4 to 0 vote on Thursday to ban products from Huawei Technologies Co. and four other Chinese electronics companies.
U.S. shares saw little change, even as the latest cyclical stock rotation round pushed NASDAQ to another record. However, the benchmark S&P 500 was flat as the previous session ended.
Treasury yields steadied earlier in the session as investors were believed to be unwinding bets on a steeper curve. Yields tumbled on Thursday thanks to the U.S. Federal Reserve signaling that monetary-policy tightening could start sooner than previously thought in its policy decision handed down earlier in the week.
The central bank caught investors by surprise when it indicated that it was ready to begin discussing asset tapering earlier than expected in its decision. The Fed will also likely raise interest rates earlier than expected, with two hikes planned by the end of 2023.