Daijiworld Media Network - Tokyo
Tokyo, Feb 16: Asian equities posted modest gains at the open on Monday as recent selling pressure eased and softer US inflation data strengthened expectations that the Federal Reserve could cut interest rates later this year.
Shares advanced in Japan after data showed the economy returned to growth in the fourth quarter of 2025, reversing a deep contraction in the previous period. The yen was little changed against the dollar. Australian stocks also edged higher at the start of a week marked by Lunar New Year holidays, which are set to keep mainland China’s markets closed throughout the week. US markets remain shut on Monday for the Presidents’ Day holiday.
Spot gold and silver — both of which have rallied alongside equities this year — slipped in early trade. The dollar held steady against major peers, while Bitcoin hovered around $68,700 after volatile weekend swings. Oil prices were largely unchanged.
The gains signalled a broadly supportive backdrop for global markets after the S&P 500 recorded back-to-back weekly declines amid uncertainty over the disruptive impact of artificial intelligence on businesses. Investor sentiment improved after data on Friday showed the US consumer price index rose just 0.2 per cent in January — the smallest increase since July — raising hopes of policy easing.
“Overall, this won’t change Fed policy, but it will ease the path towards a cut in rates sooner rather than later,” said Neil Birrell of Premier Miton Investors.
US Treasuries rallied following the inflation data, with the 10-year and the policy-sensitive two-year yields falling five basis points on Friday. There will be no cash trading in Treasuries on Monday. Australian government bond yields also declined early in the session.
Traders continued to fully price in a Fed rate cut in July, with strong odds of a move in June as well. However, Chicago Fed President Austan Goolsbee cautioned that inflation remains above target, noting that price growth is “kind of stuck at 3 per cent” and not yet on track toward the central bank’s 2 per cent goal.
In China, President Xi Jinping called for leveraging the country’s vast domestic market to anchor growth around internal demand, according to a speech released Sunday. Goldman Sachs upgraded its forecast for China’s current-account surplus this year, though a weaker earnings outlook continues to cloud sentiment toward Chinese equities.
In corporate developments, Warner Bros. Discovery is reportedly considering reopening sale talks with rival studio Paramount Global following a revised offer. New Zealand’s a2 Milk raised its full-year revenue guidance amid improving sales in China, while Macquarie Asset Management-led investors agreed to acquire Qube Holdings in a multi-billion-dollar deal. Meanwhile, Treasury Wine Estates reported weaker-than-expected revenue, citing US supply chain issues and softer demand in China.
The US Pentagon briefly added major Chinese firms including Alibaba Group, BYD and Baidu to a list of entities allegedly aiding China’s military before withdrawing the list minutes later without explanation.
Market snapshot:
In equities, S&P 500 futures rose 0.1 per cent as of 9:02 a.m. Tokyo time. Japan’s Topix gained 0.1 per cent, while Australia’s S&P/ASX 200 advanced 0.2 per cent. Euro Stoxx 50 futures dipped 0.2 per cent.
In currencies, the Bloomberg Dollar Spot Index was little changed. The euro traded at $1.1866, the yen at 152.80 per dollar, the offshore yuan at 6.9043 per dollar and the Australian dollar at $0.7070.
In cryptocurrencies, Bitcoin slipped 0.1 per cent to $68,731.57, while Ether rose 0.4 per cent to $1,966.11.
Among commodities, West Texas Intermediate crude was steady, while spot gold declined 0.5 per cent to $5,014.59 an ounce.