Google, Microsoft earnings signal Wall Street relief rally
US consumption data also aids sentiment
Japan's yen sinks to another 34-year low
(Updated at 2:49 p.m. ET (1849 GMT)
Global stocks were higher on Friday as Big Tech gains lifted Wall Street shares, while Japan's yen hit a fresh 34-year low after the Bank of Japan (BOJ) opted to keep monetary policy loose at its latest meeting.
MSCI's gauge of stocks across the globe .MIWD00000PUS rose 7.37 points, or 0.98%, to 762.99 amid tech sector optimism following robust results from Alphabet and Microsoft.
U.S. data also boosted sentiment, with the consumption expenditures (PCE) price index up 0.3% in March, in line with estimates by economists polled by Reuters. In the 12 months through March, PCE inflation advanced 2.7% against expectations of 2.6%.
The Dow Jones Industrial Average .DJI rose 204.60 points, or 0.54%, to 38,290.93, the S&P 500 .SPX gained 56.27 points, or 1.11%, to 5,104.69 and the Nasdaq Composite .IXIC gained 309.18 points, or 1.98%, to 15,920.94.
Europe's benchmark stock index had its biggest one-day gain in more than three months on Friday, closing up 1.2%, on gains in banking and industrial stocks. The technology sector got a boost from upbeat results from U.S. megacaps.
Japan's yen was volatile, hitting a fresh 34-year low after the Bank of Japan (BOJ) kept monetary policy loose at its latest policy meeting, spiking briefly as traders speculated that Japanese authorities may intervene, then sliding again.
World equities were still poised to finish the month lower, as hopes of rapid Federal Reserve rate cuts drained from the market following a series of U.S. inflation readings.
In a volatile session, the Japanese currency JPY=EBS hit a fresh 34-year low.
The Bank of Japan kept interest rates around zero at its policy meeting that concluded Friday, despite forecasting inflation of around 2% for three years.
Markets are on high alert for Tokyo authorities to prop up the currency, in what would be an unconventional and politically tough decision. BOJ Governor Kazuo Ueda said on Friday that exchange-rate volatility could significantly impact the economy.
U.S. Treasury Secretary Janet Yellen told Reuters on Thursday that currency intervention was acceptable only in "rare" circumstances and that market forces should determine exchange rates.
Yellen also said U.S. economic growth was likely stronger than suggested by weaker-than-expected data on first-quarter output.
"The stall-out of inflation's return to 2% in the first quarter is still a disappointment," Bill Adams, Chief Economist for Comerica Bank in Dallas, said in a market note.
"When the Fed meets next week, they are almost certain to say that the first quarter’s economic data don't hit their high bar to begin cutting interest rates."
The yen was trading about 40% below its fair value, Pictet Asset Management chief strategist Luca Paolini said.
"We underestimate the potential for something to go very wrong when you have a currency that is totally misaligned with (economic) fundamentals," he said.
"The sooner they hike rates, the better."
FED HOPES FADE
The yield on benchmark U.S. 10-year notes US10YT=RR fell 3.5 basis points to 4.671%, from 4.706% late on Thursday. Bond yields rise as prices fall.
The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations, fell 0.1 basis points to 4.9975%, from 4.998%.
Traders now expect the Fed to lower its main funds rate, currently at a 23-year high of 5.25% to 5.5%, by just 36 basis points this year, with some fearing a further hike.
Euro zone government bond yields were on track for the second straight weekly rise as market expectations for cumulative European Central Bank rate cuts this year dropped way below 75 basis points on the back of strong U.S. economic data.
Germany's 10-year bond yield E10YT=RR , the benchmark for the euro zone, fell 5 bps to 2.61% but is set for a weekly rise of 7 bps after being up 15 bps the week before.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.75% higher at 535.58, while Japan's Nikkei .N225 rose 306.28 points, or 0.81%, to 37,934.76.
Spot gold XAU= added 0.35% to $2,339.85 an ounce. U.S. gold futures GCc1 gained 0.13% to $2,332.90 an ounce.
U.S. crude CLc1 gained 0.12% to $83.67 a barrel and Brent LCOc1 rose to $89.33 per barrel, up 0.36% on the day.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD http://tmsnrt.rs/2egbfVhGlobal asset performance http://tmsnrt.rs/2yaDPgn BOJ keeps rates steady BOJ keeps rates steady https://reut.rs/4aSLW3u
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