Asian stock markets declined on Friday as investors pulled back from risk assets, pressured by concerns over elevated technology valuations and persistent geopolitical tensions in the Middle East. Despite strong quarterly earnings from AI giant Nvidia, market sentiment remained cautious, driving demand for safe-haven assets such as the Japanese yen, U.S. Treasuries, and gold.
Japan’s Nikkei index dropped 0.8%, tracking overnight losses on Wall Street, while MSCI’s broad Asia-Pacific index outside Japan fell 0.4%. Nvidia reported better-than-expected January-quarter results and issued an upbeat revenue forecast, yet investors appeared reluctant to push the stock higher at its current valuation. U.S. equity futures also edged lower in Asian trading, with S&P 500 E-minis down 0.41% and Nasdaq 100 E-minis off 0.36%, reflecting broader caution around AI stocks and tech sector valuations.
Geopolitical uncertainty further dampened investor confidence. Talks between the United States and Iran over Tehran’s nuclear program showed tentative progress, according to Oman’s foreign minister, but no clear breakthrough emerged. Markets continue to price in the risk of potential U.S. military action, keeping oil prices volatile. U.S. crude rose slightly to $65.27 per barrel as traders adopted a wait-and-see approach.
Currency markets showed modest movement. The dollar index inched up to 97.77, while the yen strengthened 0.2% to 155.86 per dollar. The euro and British pound remained largely stable. U.S. 10-year Treasury yields slipped to 4.002%, signaling ongoing demand for safer assets.
In Asia, economic data from Japan revealed cooling inflation in Tokyo and weaker factory output, complicating the Bank of Japan’s policy outlook. Meanwhile, China’s central bank announced it would remove foreign exchange risk reserves for certain forward contracts, lowering dollar-buying costs and supporting the yuan.
Gold held near recent highs, while cryptocurrencies saw mild declines, with bitcoin trading around $67,290 and ether near $2,016, underscoring broader market caution.


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