Asian Stocks Climb on Wall Street Gains and Strong U.S. Data

Asian shares advanced on Friday, tracking Wall Street’s record highs, as strong U.S. economic data and upbeat corporate earnings outweighed ongoing tariff concerns. The S&P 500 and Nasdaq closed at fresh peaks after U.S. retail sales and jobless claims surpassed expectations, signaling steady economic momentum. This reinforces the Federal Reserve's cautious approach to future rate cuts.

Netflix (NASDAQ:NFLX) exceeded Q2 earnings estimates, aided by a weaker dollar, but shares fell 1.8% in after-hours trading as analysts noted growth was already priced in.

MSCI’s broadest Asia-Pacific index outside Japan rose 0.8%, reaching its highest since late 2021 and marking a 1.7% weekly gain. In contrast, Japan’s Nikkei dipped 0.2%, while the yen fell 0.7% this week to 148.54 per dollar amid political uncertainty. Polls suggest Prime Minister Shigeru Ishiba’s ruling coalition may lose its majority in Sunday’s upper house election. June inflation slowed due to temporary utility bill cuts but remained above the Bank of Japan’s 2% target, with soaring rice prices fueling public dissatisfaction.

TD Securities' Jayati Bharadwaj warned that a potential Ishiba resignation could push USD/JPY above 149.7. However, a coalition win with trade progress may strengthen the yen.

Chinese blue-chip stocks gained 0.3%, and Hong Kong’s Hang Seng rose 1.2%. TSMC shares jumped 2.2% after reporting record profits, although future earnings could be impacted by U.S. tariffs.

The dollar slipped Friday but remained up 0.6% for the week. Treasury yields were slightly lower, with 10-year notes at 4.445%. Fed Governor Christopher Waller still expects a rate cut by month’s end, though markets are pricing a 62% chance for a September move.

Oil held steady near $68, supported by drone strike-related supply risks in Iraq. Spot gold was flat at $3,337, on pace for a 0.5% weekly loss.