Apple buyback pushes Asian shares higher

Singapore — Asian stocks rallied on Friday after Apple’s record $110bn share buyback plan lifted the tech sector, while the yen put more distance from recent 34-year lows to cap a tumultuous week that saw suspected interventions from Tokyo.

With markets in Japan and mainland China closed on Friday, regional trading activity is likely to be subdued as traders look ahead to the US nonfarm payrolls data later in the day.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5% and was set for a second consecutive week of gains. Hong Kong’s Hang Seng index spiked 2% higher, on course for a 5% gain for the week.

The yen strengthened 0.55% to ¥152.80 to the dollar in early trading on Friday, having started the week by touching a 34-year low of ¥160.245 to the dollar on Monday.

In between, traders suspect the authorities stepped in on at least two days this week and data from the Bank of Japan (BOJ) suggests Japanese officials may have spent about $60bn to defend the beleaguered yen, leaving trading desks across the globe on high alert foe further moves by Tokyo.

A series of Japanese public holidays as well as Monday’s holiday in the UK — the world’s biggest FX trading centre — could present a possible window for further intervention by Tokyo. Japanese markets are also closed on Monday.

The yen has weakened for over a decade, largely due to low Japanese interest rates drawing funds out of the country towards higher-yielding assets in other large economies including the US. Despite the sizeable bounce in the yen this week, it is still down 8% against the dollar so far in 2024.

While there has been two bouts of suspected ministry of finance (MOF) interventions, another $20bn of yen buying on Friday would really scare off the yen shorts and get dollar-yen below ¥150, Chris Weston, head of research at Pepperstone, said in a note.

“Good things come in three’s, and while another bout of intervention seems unlikely, the MOF/BOJ could turn momentum trader and shake things up one last time ahead of nonfarm payrolls.”

The dollar index, which measures the US currency against six peers, was last at 105.25. The index is set to clock a 0.7% decline for the week, its worst weekly performance since early March.

The Federal Reserve this week left rates unchanged and signalled that its next policy move will be to lower its rates, though chair Jerome Powell noted that recent strong inflation readings have suggested that the first of these cuts could be a long time in coming.

“The Federal Reserve has clearly had its confidence shaken by the recent string of disappointing inflation releases,” said Susan Hill, senior portfolio manager at Federated Hermes.

While the bar for moving back to a tightening bias is quite high, it seems likely that the current 5.25%-5.50% Fed Funds target range will be unchanged for the next several months, Hill said.

US stocks ended higher on Thursday, with tech heavy Nasdaq advancing 1.5% buoyed by chip stocks.

In after market hours Apple reported quarterly results and forecast that beat modest expectations and unveiled a record share buyback programme, sending its stock up almost 7% in extended trade.

US economic data on Thursday also showed the labour market remains tight, ahead of key government payrolls data due later on Friday. Economists polled by Reuters forecast 243,000 jobs, with estimates ranging from 150,000-280,000.

In commodities, US crude rose 0.39% to $79.26 a barrel and Brent was at $83.98, up 0.37% on the day.

Spot gold was last $2,304.16/oz and were set for second consecutive weekly decline.

Reuters