Stocks rise globally, dollar gains on yen after Japan's rate hike
A stock quotation board is reflected on window glasses at a building in Tokyo, Japan December 11, 2025. REUTERS/Issei Kato
NEW YORK/ LONDON Dec 19 : MSCI's global equities gauge was advancing on Friday with technology leading Wall Street higher while the yen weakened after the Bank of Japan raised interest rates to a three-decade high and left the door open to further tightening.
Oil prices rose as traders weighed the potential impact of supply disruption from Venezuela, as U.S. President Donald Trump told NBC News in an interview published on Friday he was leaving the possibility of war with the country on the table.
The BOJ's widely expected rate hike led investors to sell the yen on the fact and drove some profit-taking, prompting traders to consider the chances of official intervention to support the currency. Japan's 10-year government bond yield hit a 26-year peak and the Nikkei closed up 1 per cent..
On the U.S. data front, existing home sales rose marginally in November as economic uncertainty and still-elevated mortgage rates curbed demand. University of Michigan's survey of consumer sentiment came in lower than consensus estimates but above the November number.
"The economy may be moving out of what appears to have been a mild soft patch in economic growth," said Gary Schlossberg, global strategist at Wells Fargo Investment Institute, referring to Friday's data and Thursday's consumer price inflation of 2.7 per cent even as he cautioned that CPI may have been distorted by the 43-day government shutdown.
"We could still be feeding off the CPI news yesterday. It's an important event at face value. We're a little skeptical just how much of an improvement in inflation we saw," said Schlossberg but he added that "it looks like inflation may have peaked, at least for now. That has to be good news for the Fed and by extension markets."
MSCI's gauge of stocks across the globe <.MIWD00000PUS> rose 7.08 points, or 0.71 per cent, to 1,008.26 while the pan-European STOXX 600 <.STOXX> index rose 0.44 per cent.
On Wall Street at 11:42 a.m., the Dow Jones Industrial Average <.DJI> rose 280.23 points, or 0.58 per cent, to 48,232.08, the S&P 500 <.SPX> rose 56.22 points, or 0.83 per cent, to 6,830.98 and the Nasdaq Composite <.IXIC> rose 256.36 points, or 1.11 per cent, to 23,262.72.
BOJ RAISES RATES, YEN SLIPS
In currencies, the yen weakened sharply against the dollar and other major currencies as traders drove it towards levels that could trigger official buying after the Bank of Japan raised rates to a 30-year high but did not offer clarity on future hikes.
Against the Japanese yen , the dollar strengthened 1.22 per cent to 157.44.
The dollar index <=USD>, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.2 per cent to 98.64, while the euro was down 0.03 per cent at $1.1718.
In fixed income markets, U.S. Treasury yields rose in line with global bond yields on Friday after the Bank of Japan raised interest rates, while investors continued to evaluate delayed economic releases and the direction of Federal Reserve policy.
The yield on benchmark U.S. 10-year notes rose 2.3 basis points to 4.139 per cent, from 4.116 per cent late on Thursday while the 30-year bond yield rose 1.8 basis points to 4.8181 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.3 basis points to 3.483 per cent, from 3.46 per cent late on Thursday.
In energy markets, oil prices rose as the market waited for news about a possible Russia-Ukraine peace deal and monitored U.S. moves regarding Venezuela while also digesting the latest central bank interest rate decisions around the world.
U.S. crude rose 0.82 per cent to $56.61 a barrel and Brent rose to $60.25 per barrel, up 0.72 per cent on the day.
Gold prices rose slightly as a stronger U.S. dollar and rising Treasury yields dented demand for the non-yielding metal, though bullion was still set for a weekly gain.
Spot gold rose 0.26 per cent to $4,342.99 an ounce. U.S. gold futures rose 0.34 per cent to $4,354.40 an ounce.
