Asian shares track Wall Street higher, yen weak

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7% to its highest since late 2021, bringing the weekly gain to 1.5%

Asian shares tracked Wall Street higher on Friday as still-strong U.S. economic data and robust corporate earnings offset tariff worries, while the yen headed toward a second successive week of loss ahead of Japan’s upper house election.

Overnight, the S&P 500 and the Nasdaq again closed at record highs as U.S. data including retail sales and jobless claims beat forecasts, indicating a modest improvement in the economy that should give the Federal Reserve time to gauge the inflation impact from higher U.S. tariffs.

Streaming giant Netflix beat Wall Street’s lofty expectations for second-quarter earnings in part due to a weaker U.S. dollar. Its share price, however, fell 1.8% in after-hours trading, with analysts saying much of the growth had already been priced in.

European share markets are set for a higher open, with EUROSTOXX 50 futures 0.4% higher. Wall Street futures were up 0.2%.

On Friday, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.7% to its highest since late 2021, bringing the weekly gain to 1.5%.

Japan’s Nikkei, however, slipped 0.2%, and the yen slipped 0.1% to 148.77 per dollar and was down about 0.7% this week after polls showed Prime Minister Shigeru Ishiba’s coalition was in danger of losing its majority in the election on Sunday.

Data on Friday showed Japan’s core inflation slowed in June due to temporary cuts in utility bills but stayed beyond the central bank’s 2% target. The rising cost of living, including the soaring price of rice, is among the reasons for Ishiba’s declining popularity.

If PM Ishiba decides to resign on an election loss, USDJPY could easily break above 149.7 as it would usher in an initial period of political turbulence, said Jayati Bharadwaj, head of FX strategy at TD Securities.

JPY could reverse the recent dramatic weakness if the ruling coalition wins and is able to make swift progress on a trade deal with Trump, Bharadwaj added.

Chinese blue-chips rose 0.4% while Hong Kong’s Hang Seng index gained 0.8%.

The Tapei-listed shares of TSMC, the world’s main producer of advanced AI chips, rose 1.3% after posting record quarterly profit, though it said future income might be affected by U.S. tariffs.