Global shares steady as US consumer data bolsters confidence; yen weak ahead of Japan vote
Global stock markets edged higher on Friday, buoyed by strong U.S. economic data and a positive start to the earnings season, while the Japanese yen slipped amid uncertainty ahead of a critical legislative election on Sunday.
Robust U.S. retail sales and lower-than-expected jobless claims suggested a modest improvement in economic activity, helping the S&P 500 and Nasdaq close at record highs on Thursday. The MSCI global stock index rose 0.2%, poised for a weekly gain of 0.6%. Asian shares outside Japan advanced 0.9%, while European markets remained mostly flat, News.Az reports, citing Reuters.
Investor confidence is also supported by upbeat corporate earnings, with streaming giant Netflix surpassing forecasts. Alphabet and Tesla are among the major companies scheduled to report next week, offering further insights into market sentiment.
Oil prices rose on Friday amid fresh European Union sanctions targeting Russia’s energy sector, with U.S. crude climbing 1% to $68.19 per barrel and Brent crude up 0.8% at $70.06.
The yen was broadly steady at 148.5 per dollar but posted a weekly decline of approximately 0.7% as polls indicated Prime Minister Shigeru Ishiba’s coalition faces potential losses in Sunday’s upper house election. Inflation data showed Japan’s core inflation eased in June but remained above the Bank of Japan’s 2% target, with rising living costs contributing to Ishiba’s waning support.
Jayati Bharadwaj, head of FX strategy at TD Securities, noted:
“If PM Ishiba resigns after an election loss, USD/JPY could surge above 149.7 amid political turbulence. Conversely, a ruling coalition win and swift progress on a trade deal with the U.S. could reverse recent yen weakness.”
Meanwhile, the U.S. dollar index dipped 0.2% to 98.285 but was on track for its second consecutive weekly gain, recovering from a 3½-year low hit recently. Treasury yields fell slightly, with the 10-year benchmark down nearly 3 basis points to 4.44%, and two-year yields also edging lower.
Fed Governor Christopher Waller reiterated support for an interest rate cut later this month, although most officials have not indicated a similar stance.
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