The broader all-share index advanced 89 points, or 2 percent, to settle at 4,663.29, on a value turnover of P8.9 billion.
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Advertisment Asia traded mixed on Thursday amid lingering uncertainty over key central bank policy meetings next week, while markets in China, Taiwan and South Korea were closed for public holidays. The past week’s data included retail sales falling by more than expected last month and producer prices, a sign of future inflation, unchanged.
Among the big banks, Commonwealth Bank of Australia, Westpac, National Australia Bank and ANZ Bank are higher in a range of 0.7 percent to 1.0 percent.
The gap between five-year note yields and 30-year bonds yields widened to 129.70 basis points, the steepest since June 27.
Financial markets are pricing in a roughly 12 per cent probability of a rate hike next week, down from 15 per cent before the data, according to the CME FedWatch tool.
Gold rose to trim a weekly decline as traders scaled back odds for a USA interest rate increase at next week’s Federal Reserve meeting.
The dwindling chances of a rate hike helped boost USA stock indexes between 1 percent and 1.5 percent on Thursday. The Federal Reserve’s Open Market Committee, which last raised borrowing costs in December 2015 to end seven years of near-zero rates, meets on September 20-21, with a news conference by chair Janet Yellen due on the Wednesday.
However, while there are concerns about monetary policy, a report in the respected Nikkei business daily said BoJ policymakers were considering cutting borrowing costs further into negative territory, sending banking shares tumbling in Tokyo.
Although there is speculation the central bank may start to buy foreign bonds, many analysts say the BOJ won’t do that, given that Japanese law prohibits the bank from buying foreign debt to manipulate exchange rates.
Few Japanese companies believe the central bank’s aggressive monetary stimulus will achieve its goal of spurring inflation, a Reuters poll found, with firms citing negative fallout from the programme more than positive effects.
Meanwhile, sterling has weakened against its counterparts ahead of today’s Bank of England’s interest rate decision, to be decided by the Monetary Policy Committee.
“The disappointing retail sales numbers really reinforces our view that it would be hard for the Fed to lift rates next week”, said Bill Merz, an investment strategist at US Bank Wealth Management in Minneapolis.
BofA Merrill Lynch said the strength of the yen this year – a dollar now buys ¥101.61 – has led to speculative yen buying and increased FX hedging of foreign assets by domestic investors, creating a backlog of yen-bearish “magma”.
The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was up 0.01% at 86.53.
The euro was flat for both Friday and the week at $1.1238. US long-term yields have risen in the past month, hitting a three-month high on Tuesday. That followed gains on Thursday of as much as 2.5 per cent as renewed risk appetite stemmed a two-day rout. U.S. West Texas Intermediate futures were down 0.6 percent, at $43.67 a barrel.
Gold inched up after the resurgence in risk appetite pushed it down 0.7 percent on Thursday.
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The 10-year U.S. Treasury note yield stood at 1.702%, after sliding overnight to as low as 1.682%.
