Stock index futures were higher on Friday following Wall Street’s rally Thursday
Nasdaq 100 futures: +94 points
Dow industrial average futures: +7 points
S&P 500 futures: +13.50 points
Carry trade resilience AUDJPY Higher
Treasury yields are higher across the curve:
2-yr: 4.7219%, +3.2 basis points
5-yr: 4.8342%, +3.3 basis points
10-yr: 4.9694%, +2.2 basis points
30-yr: 5.2985%, +0.3 basis point
The U.S. dollar is mostly higher as North American traders enter for the day.
Australian dollar is the lone major currency trading higher against the greenback, while the Japanese yen is by far the weakest. The largest move is in USDJPY, which has surged toward the 158.00 area following the Bank of Japan’s rate decision.
EUR: USD higher by 0.01%
JPY: USD higher by 1.21%
GBP: USD higher by 0.08%
CHF: USD higher by 0.12%
CAD: USD higher by 0.17%
AUD: USD lower by 0.18%
NZD: USD higher by 0.40%
BOJ raises rates, but the guidance disappoints yen buyers
The Bank of Japan raised its policy rate by 25 basis points to 1.25%, its highest level since 1995. On the surface, that is a hawkish move. However, the increase was widely expected, meaning the market was more interested in what the BOJ would say about the path forward.
Governor Kazuo Ueda did not give yen buyers the clear signal they wanted. Future decisions remain dependent on inflation and economic developments, and he stopped short of indicating that another increase was likely at the next meeting.
The 7–2 vote also showed some internal resistance. Two policymakers opposed the move because of concerns about economic growth, adding uncertainty about the timing and pace of future tightening.
This is a classic example of the market trading expectations rather than simply reacting to the headline.
The BOJ raised rates, but that move was already priced in. Yen buyers needed guidance pointing toward another hike relatively soon. When they did not get it, yen-long positions were unwound and USDJPY moved sharply higher.
The interest-rate differential also remains firmly in favor of the U.S. dollar. Japan’s policy rate is now 1.25%, but U.S. rates remain substantially higher and the Federal Reserve delivered a more hawkish policy outlook this week.
F-35 sale to Saudi Arabia:
The State Department approved a potential $24.3B sale of 48 Lockheed Martin (LMT) F-35 Lightning II aircraft to Saudi Arabia, along with 49 Pratt & Whitney F135-PW-100 engines and related equipment. The deal still requires congressional approval and would strengthen Saudi Arabia’s air defense and interoperability with U.S. and allied forces.
China tariff decision may slip: The U.S. could postpone announcing new tariffs on China and other countries until after President Donald Trump meets Chinese President Xi Jinping next week, Bloomberg reported. A previously planned trade report was expected to recommend a 7.5% tariff on Chinese goods, while the final rate could potentially exceed the 20% level agreed during earlier talks.
Nvidia targets chip volume growth: Nvidia (NVDA) CEO Jensen Huang said the company expects to sell roughly twice as many chips next year as this year as demand for AI infrastructure expands. Huang said customers across industries and countries are continuing to invest in AI, highlighting the potential for further growth in Nvidia’s chip demand.
CXMT expands into NAND memory: China’s ChangXin Memory Technologies is preparing to enter the NAND flash-memory market as AI infrastructure drives demand across the global memory industry. Reuters reported that CXMT plans an R&D production line at its new Beijing plant and has established a research institute in the city, broadening its focus beyond DRAM.
OpenAI adds SpaceX sales executive: OpenAI (OPENAI) has hired Brian McCarthy from SpaceX (SPCX) as vice president of worldwide sales, Fortune reported. McCarthy joined SpaceX through its acquisition of Cursor, where he led global revenue and field operations, and previously held senior sales roles at Rubrik (RBRK), ThoughtSpot, AppDynamics and Qlik.