12/19/25 05:02Japan bond yields jump after BOJ hike, Wall Street poised for gains
– Reuters
Japanese government bond yields jumped and the yen weakened on Friday after the Bank of Japan raised interest rates to a three-decade high and left the door wide open to further tightening.
Global stocks saw some gains, with European stocks edging 0.1 per cent higher but failed to match much stronger trading sessions in Asia and the U.S. overnight. Wall Street futures pointed to gains of between 0.3 per cent and 0.5 per cent, after rallying Thursday on stellar results from chipmaker Micron Technology (MU-Q).
Investors were also digesting news that the European Union would provide Ukraine with 90 billion euros (US$105.4-billion) of support over the next two years, but failed to agree on an ambitious plan to use frozen Russian assets to finance this.
The BOJ’s widely expected rate hike led investors to sell the yen on the fact and drove some profit-taking. The dollar was last up as much as 1 per cent on the yen at 157.07., while Japan’s 10-year government bond yield hit a 26-year peak and the Nikkei closed up 1 per cent.
The BOJ’s decision to raise short-term rates to 0.75 per cent marks another step in ending decades of huge monetary support in the country. Analysts said it would need to plot a careful path to manage inflation as Japan’s new government prepares major fiscal stimulus.
Wider sentiment got a boost from a surprise slowdown in U.S. consumer price inflation to 2.7 per cent, though analysts cautioned the data were clearly distorted lower by the government shutdown and could not be taken at face value.
Pricing for the Federal Reserve moved only marginally with a rate cut in January implied at just 27 per cent, while 10-year Treasury yields were at 4.1354 per cent, some way from the recent 3-1/2-month top of 4.209 per cent.
12/19/25 04:30Thursday markets recap: Stocks higher, fuelled by soft inflation data
– Reuters, Globe staff
People eat and drink inside the Moynihan Train Hall in New York City on Thursday. A U.S. inflation report showed consumer prices increased less than expected in the year to November.Spencer Platt/Getty Images
Major indexes closed higher on Thursday as a soft U.S. inflation report fed expectations for interest rate cuts by the Federal Reserve, while chipmaker Micron’s MU-Q blowout forecast signalled strong AI demand.
The Consumer Price Index report showed that consumer prices increased less than expected in the year to November. The U.S. Bureau of Labour Statistics did not publish month-to-month CPI changes after the 43-day shutdown of the government prevented the collection of October data.
The three major U.S. indexes rebounded from three-week lows, and the Russell 2000 index, tracking rate-sensitive smallcaps, also advanced 0.8 per cent.
A U.S. jobless claims report showed new applications fell last week, reversing the prior week’s surge and suggesting labour market conditions remained stable in December. Earlier this week, an official jobs report showed U.S. job growth rebounded in November and the unemployment rate rose to 4.6 per cent.
Traders now see a 58 per cent chance for a dovish policy move by the Fed in March, according to CME’s FedWatch Tool.
The Dow Jones Industrial Average rose 65.88 points, or 0.14 per cent, to 47,951.85, the S&P 500 gained 53.33 points, or 0.79 per cent, to 6,774.76 and the Nasdaq Composite gained 313.04 points, or 1.38 per cent, to 23,006.36.
Six of the 11 S&P sectors gained, led by consumer discretionary stocks, which rose 1.78 per cent.
Lululemon LULU-Q surged 3.5 per cent on a report that activist investor Elliott has acquired more than a US$1-billion stake in the athletic-wear company. Among tech stocks, Micron Technology jumped 10.2 per cent after the company forecast quarterly profit at nearly double what analysts were expecting on strong artificial intelligence-related demand.
Canada’s main stock index took its direction from Wall Street. The S&P/TSX Composite index ended up 190.83 points, or 0.6 per cent, at 31,440.85 after four straight days of declines.