Yen Weakens Amid Risk-On Sentiment — Market Talk

By Sherry Qin

Asian markets advanced broadly on Friday, lifted by strong U.S. tech earnings and tentative signs of easing U.S.-China trade tensions.

Meta reported robust sales and steady growth guidance, while Microsoft said corporate clients aren't cutting technology spending yet, easing fears that tariffs could hit the Magnificent Seven.

Sentiment also improved after China's Commerce Ministry said it is considering trade talks with the U.S., raising hopes for de-escalation.

The official response from Beijing is seen as a sign of easing and shows China is more willing to hold trade talks with the U.S., ANZ Research senior China strategist Zhaopeng Xing said.

"Markets welcomed signs of easing trade tensions that have driven fears of an economic slowdown," Commerzbank Research analysts said in a note.

Taiwan's Taiex Index led regional gains, rising 3.05%, with TSMC up 4.6% after Meta and Microsoft reaffirmed strong AI-related capex plans. Morgan Stanley said TSMC's "major overhangs" have been largely removed and reinstated the stock as a Top Pick.

Hong Kong's Hang Seng Index closed 1.7% higher and the Hang Seng Tech Index rose 3.1%. Alibaba and Tencent advanced 3.8% and 2.2%, respectively. Chinese auto stocks rose sharply after robust April sales, with XPeng up 6.7% and Xiaomi gaining 6.3%. Japan's Nikkei Stock Average added 1.0%, South Korea's Kospi rose 0.1% and markets in Malaysia, Indonesia and Thailand also gained.

Mainland China markets were closed for the Labor Day holiday.

In commodities, copper rose after Beijing officials raised hopes for lower tariffs. Gold gained 0.5% as safe-haven demand eased amid improving risk sentiment.

In currencies, the yen weakened against most other Group of 10 and Asian currencies on risk-on flows and softer Bank of Japan rate expectations.

The Japanese central bank's language carried a cautious undertone, NAB's senior FX strategist Rodrigo Catril said. "Risks to prices [are] skewed to [the] downside for FY 2025 and FY 2026," he said.

The Australian dollar rose 0.4% to 93.20 yen and the euro edged 0.1% higher to 164.28 yen.

The offshore yuan also strengthened against the dollar as possibilities of trade talks continued to linger, while the Taiwan dollar was 2.5% higher against the greenback on easing trade tensions and a brighter semiconductor outlook.

Write to Sherry Qin at sherry.qin@wsj.com

By Sherry Qin

Asian markets advanced broadly on Friday, lifted by strong U.S. tech earnings and tentative signs of easing U.S.-China trade tensions.

Meta reported robust sales and steady growth guidance, while Microsoft said corporate clients aren't cutting technology spending yet, easing fears that tariffs could hit the Magnificent Seven.

Sentiment also improved after China's Commerce Ministry said it is considering trade talks with the U.S., raising hopes for de-escalation.

"Markets welcomed signs of easing trade tensions that have driven fears of an economic slowdown," Commerzbank Research analysts said in a note.

Taiwan's Taiex Index led regional gains, rising 2.35%, with TSMC up 3.7% after Meta and Microsoft reaffirmed strong AI-related capex plans. Morgan Stanley said TSMC's "major overhangs" have been largely removed and reinstated the stock as a Top Pick.

Hong Kong's Hang Seng Index gained 1.6% and the Hang Seng Tech Index rose 3.2%. Alibaba and Tencent advanced 4.3% and 2.4%, respectively. Japan's Nikkei Stock Average added 1.1% and South Korea's Kospi rose 0.2% and markets in Malaysia, Indonesia and Thailand also gained.

Mainland China markets were closed for the Labor Day holiday.

In commodities, copper rose after Beijing officials raised hopes for lower tariffs. Gold gained 0.5% as safe-haven demand eased amid improving risk sentiment.

In currencies, the yen weakened against most other Group of 10 and Asian currencies on risk-on flows and softer Bank of Japan rate expectations.

The Japanese central bank's language carried a cautious undertone, NAB's senior FX strategist Rodrigo Catril said. "Risks to prices [are] skewed to [the] downside for FY 2025 and FY 2026," he said.

The Australian dollar rose 0.4% to 93.20 yen and the euro edged 0.1% higher to 164.28 yen.

The offshore yuan also strengthened against the dollar as possibilities of trade talks continued to linger, while the Taiwan dollar was 2.5% higher against the greenback on easing trade tensions and a brighter semiconductor outlook.

Write to Sherry Qin at sherry.qin@wsj.com