Asian Markets Extend Rally Amid Global Economic Changes

Asian markets enjoyed a rally driven by a significant U.S. interest rate cut, while the yen slightly strengthened as Japan held rates steady. European shares are set for a lower open despite Wall Street's record close. Meanwhile, China's central bank kept rates stable, defying expectations for a cut.

Asian shares continued their upward trend on Friday, buoyed by a notable U.S. interest rate cut. The yen saw a marginal rise as the Bank of Japan decided to keep rates steady, maintaining a positive outlook on the economy. However, European markets are predicted to open lower, with EUROSTOXX 50 futures down 0.3% and FTSE futures falling 0.5%. On Wall Street, futures also dipped slightly, although the S&P 500 hit a record close on Thursday.

In China, the central bank left benchmark lending rates unchanged, against expectations for a reduction. As a result, Chinese shares lagged, with blue chips dropping by 0.5%. The onshore yuan gained to its highest level in nearly 16 months, prompting state bank intervention to curb rapid appreciation. MSCI's broadest index of Asia-Pacific shares outside Japan climbed 0.6% to reach a two-month high, driven by overnight gains on Wall Street. The index is poised for a weekly gain of 2.4%.

The Nikkei gained 1.5% and is up 3.1% for the week. In a succinct statement, the BOJ kept its short-term rate at 0.25%, as anticipated, while upgrading its view on consumer spending. The yen has risen 14% since early July but faces resistance at the 140 per dollar mark. Data released Friday showed Japan's core inflation accelerating for the fourth month, supporting further policy tightening. Investors await insights from Governor Kazuo Ueda regarding potential rate hikes in the upcoming press briefing.

(With inputs from agencies.)