Asian Stocks Gain On US Dollar Strength, Nikkei Hits 27-Yr High

Asian Stocks Talking Points:

  • Stock markets posted broad gains
  • The Nikkei 225 was last higher in late 1992
  • The US Dollar was broadly firmer, indeed it was the single main factor behind stock gains

Find out what retail foreign exchange investors make of your favorite currency’s chances right now at the DailyFX Sentiment Page

The Nikkei 225 hit a 27-year high on Friday, boosted by a still-weaker Japanese Yen as the US Dollar continued to build on the strength built up after this week’s Federal Reserve monetary policy meeting.

The Tokyo benchmark got as high as 24,286,10, its best showing since November 1991. Asian stocks more broadly seems set to end a twitchy month with some gains. Stocks in Australia, Hong Kong and Shanghai were also higher as their closes loomed. A stronger Dollar often helps Asia’s export-heavy bourses as investors anticipate increased US demand for their goods.

Friday’s trade was dominated by this factor, it seems, even though trade worries continue to glower over these markets. The one exception to the overall market cheer came from South Korea where the Kospi failed to hold on in the green.

In the foreign exchange space, USD/JPY gains took it up to peaks not seen since November, 2017. Its monthly-chart uptrend now has the previous tops of late 2016 in sight.

Creeping Higher. US Dollar Vs Japanese Yen, Monthly Chart

Gold prices hovered near two week lows thanks to that stronger Dollar, with crude oil prices up once again on investor uncertainty over fallout from sanctions against major producer Iran.

Still awaiting investors on the Friday data schedule are German unemployment numbers, another look at the UK’s second quarter Gross Domestic Product, and the Eurozone Consumer Price Index. From the otherside of the Atlantic, there’s Canadian GDP to come, along with US personal spending numbers and the University of Michigan’s consumer sentiment snapshot.

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— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

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