China's Stimulus Buoys Global Stocks as Ishiba Set to Become Japan's PM

China's extensive stimulus measures have propelled global stocks to near-record highs, while the yen strengthened sharply following Shigeru Ishiba's likely appointment as Japan's next prime minister. European stocks saw modest gains. The dollar weakened significantly against the yen, and traders are eyeing the Federal Reserve's upcoming rate decisions.

China's significant stimulus actions have propelled global stocks near record highs on Friday. Simultaneously, the yen strengthened sharply against the dollar after ex-defense minister Shigeru Ishiba seemed poised to become Japan's next prime minister. Europe's benchmark STOXX 600 index increased by 0.2%, reaching an all-time high, as the German DAX, France's CAC 40, and Britain's FTSE 100 posted gains between 0.1% and 0.4%.

The dollar saw a notable drop of 1.4% to 142.78 yen, undoing earlier gains when market participants anticipated hardline nationalist Sanae Takaichi's victory. Ishiba, in his fifth and reportedly final bid to lead the ruling Liberal Democratic Party, backs the Bank of Japan's termination of negative interest rates and pledged to revive regional economies. Senior economist Min Joo Kang believes Ishiba's policies will sustain inflation and growth.

The dollar was last down 1.2% against the yen at 143.03 yen, causing futures tracking the Nikkei stock index to fall by about 5%. Prompted by Beijing's economic revival pledges, MSCI's global stocks index also rose by 0.2%. China's blue chips surged 4.5%, accumulating a weekly increase of 15.7%. Hong Kong's Hang Seng index gained 3.6%, marking its best week since 1998. Analyst Kiran Ganesh of UBS Global Wealth Management indicated further potential, contingent on more fiscal stimulus details from China.

(With inputs from agencies.)