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Asian Stocks Edge Higher Ahead of BOJ Meeting as Dollar Weakens and Gold Hits Record Highs

Asian Stocks Edge Higher Ahead of BOJ Meeting as Dollar Weakens and Gold Hits Record Highs. Source: Image by Gerd Altmann from Pixabay

Asian stock markets posted modest gains in early Friday trading as investors turned cautious ahead of the Bank of Japan’s latest policy decision, which is widely expected to leave interest rates unchanged. Market sentiment remained fragile but supported by easing global policy concerns and a softer U.S. dollar.

MSCI’s broadest Asia-Pacific index excluding Japan rose 0.4%, while Japan’s Nikkei 225 added 0.2%. U.S. stock futures were mixed, with S&P 500 e-mini futures last up 0.1%, reflecting uncertainty after a strong rebound on Wall Street. On Thursday, U.S. equities extended gains for a second session after President Donald Trump eased earlier tariff threats against European goods and ruled out the use of force regarding Greenland. The S&P 500 advanced 0.5%, while the Nasdaq Composite surged 0.9%, driven by renewed risk appetite.

Analysts noted that markets welcomed the shift in tone, leading to a rebound in risk assets and flatter government bond yield curves, though policy uncertainty remains elevated and further volatility is expected. Ahead of the BOJ meeting, the Japanese yen weakened 0.1% to 158.54 per dollar, despite data showing Japan’s core consumer inflation rose 2.4% year-on-year in December, matching expectations.

The U.S. dollar index hovered near its lowest levels of the year at 98.329 after recording its biggest one-day drop in six weeks. Fed funds futures indicate a 96% probability that the Federal Reserve will keep rates unchanged at its upcoming January meeting. The U.S. 10-year Treasury yield edged up slightly to 4.247%.

Commodity markets saw strong momentum, with gold climbing for a fifth straight session to a record $4,951.47 per ounce, supported by dollar weakness. Silver jumped 1.7% to $97.85. In Asia, South Korean stocks led gains, with the Kospi rising 1.1% for a third consecutive day after surpassing the 5,000 milestone, helped by reform optimism and chip sector strength despite weak guidance from Intel.

In other markets, Brent crude rose 0.4% to $64.30 a barrel, while Bitcoin and ether posted modest gains, reflecting steady investor interest in digital assets.

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