- Asian markets edged higher with Japan leading gains, as the Nikkei surged 2.1% following stronger-than-expected Tokyo inflation data. Chinese stocks advanced modestly with CSI 300 up 0.4%, while South Korea's KOSPI fell over 1.5% amid political turmoil surrounding an impeachment vote for acting president Han Duck-soo.
- Tokyo core CPI accelerated to 2.4% in December from 2.2% in November, keeping alive expectations for a BOJ rate hike. Some BOJ policymakers saw conditions aligning for a near-term move, with one predicting action "in the near future," though views remained divided on timing amid uncertainties around incoming President Trump's policies.
- The Japanese yen strengthened after Finance Minister Kato reiterated warnings against excessive currency moves, with USD/JPY easing 0.3% to 157.59. The dollar index held near two-year highs, keeping most Asian currencies under pressure. USD/INR touched new record highs above 85.7.
- China's industrial profits declined 7.3% year-on-year in November, improving from October's 10% drop but still on track for their worst annual performance since 2000. The World Bank revised its 2024 China growth forecast slightly higher to 4.9%, while warning of persistent headwinds from weak household confidence and property sector challenges.
- Oil prices were steady with Brent at $72.76 and WTI at $69.61, set for modest weekly gains on China stimulus hopes. API data showed U.S. crude inventories fell 3.2 million barrels last week, with EIA report due later Friday. Sinopec sees China's oil consumption peaking in 2027.
- Gold traded flat around $2,633 amid thin year-end volumes but remained on track for a 0.3% weekly gain. The precious metal has surged about 28% in 2024, its strongest yearly performance since 2011. Silver held steady at $30.38 while platinum was unchanged at $954.50.
- Copper prices rose 0.5% to $9,008.50 after Chinese smelters lowered Q1 2025 processing charges by 28.6%, reflecting concentrate shortages. However, gains were capped by dollar strength. Iron ore fell below $100/ton for the first time in five weeks on China growth concerns.
- Bitcoin steadied around $96,000 after pulling back from recent highs, with traders taking profits ahead of a major options expiry. Over $14 billion in Bitcoin options and $3.8 billion in Ethereum options are set to expire Friday, potentially driving market volatility.
- BYD faced controversy in Brazil after labor authorities identified human trafficking involving Chinese workers at its factory construction site. The incident has sparked rare domestic criticism of BYD in China and raised concerns about the EV maker's rapid global expansion amid heightened scrutiny.
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