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(Bloomberg) -- Asian equities were on track to close the week higher, following a rebound in technology stocks that pushed Wall Street to a record high. Oil fell after President Donald Trump urged OPEC to lower crude prices and said he will push for interest-rate cuts.
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Futures contracts pointed to gains in shares from Sydney to Shanghai, although Tokyo’s advances looked marginal ahead of a key interest rate decision by the Bank of Japan later Friday. The S&P 500 rose 0.5%, with the gauge topping the 6,100 milestone. Tech shares, which weighed heavily on the market throughout most of the session, rebounded in the final stretch of trading. A gauge of dollar strength edged lower while the yen strengthened.
A drop in oil, which tends to ease concerns about inflation, pushed the policy-sensitive two-year yield down. Trump used an address to world leaders gathered in Davos, Switzerland, to say he would ask Saudi Arabia and other OPEC nations to “bring down the cost of oil,” casting the push for more crude output as a way to heighten pressure on Russia and help end the nearly three-year war in Ukraine.
“Trump, rightly or wrongly, wants to see a positive supply shock in the energy sector,” said Neil Dutta at Renaissance Macro Research. “That in turn will bring down inflation expectations, which in turn, will bring down rates.”
Traders will now turn their attention to the Bank of Japan, where the central bank is widely expected to raise its benchmark rate by the most in 18 years. Governor Kazuo Ueda and his board will likely decide to increase the overnight call rate to 0.5% in a show of boosted confidence over the sustainability of inflation as Japan progresses down its normalization path. The 25 basis point increase would be the largest since February 2007.
Meanwhile, in a bid to shore up its ailing equity market ahead, the China Securities Regulatory Commission said mutual funds should raise their holdings of onshore equities by at least 10% annually for the next three years, while large state-owned insurers will need to invest 30% of their new policy premiums from 2025.
Elsewhere in Asia, trade data out of the Philippines, Taiwanese economic growth and Japanese national inflation numbers are all scheduled for release on Friday.