From Bloomberg

US Futures Rise as Yen Weakens After BOJ Decision: Markets Wrap

• 10-year Treasury yield touches 4.5% for first time since 2007
• Yen weakens as Bank of Japan leaves rates, guidance unchanged

US equity futures rose and shares in Asia erased earlier declines Friday in a sign of steadying risk sentiment as investors adapt to the prospect interest rates will remain higher for longer.

Gains for US contracts followed the worst day for the S&P 500 since March on Thursday as the index dropped 1.6%, while the tech-heavy Nasdaq 100 fell 1.8%. Europe equity futures fell.

In Asia, a region-wide equity index retraced early declines as benchmarks in Japan, Australia and South Korea trimmed morning losses. Chinese stocks rallied to cap a run of daily declines with tech particularly well bid. The Hang Seng Tech index gained as much as 2.6%.

The advance for Chinese stocks likely reflects “short covering on expectations of more policy support measures over the weekend, just like the government’s moves in every weekend this month,” said Steven Leung, an executive director at Uob Kay Hian Hong Kong Limited. Still, while “economic figures have shown some improvement, investor confidence remains weak,” he said.

The Bloomberg dollar index steadied, while the yen weakened after the Bank of Japan held interest rates, its 10-year yield target and forward guidance unchanged. The central bank reiterated its expectation that inflation is decelerating. Earlier, consumer price data exceeded estimates, casting doubt on the BOJ’s expectation that price pressures will peak in 2023 and fall back toward the 2% target in coming years.

Treasury yields were broadly flat after initially rising on the long end of the curve in Asian trading, pushing the 10-year yield to 4.5%, the highest level since 2007. Rising Treasury yields on Thursday followed the latest reading on the US labor market, which reinforced the case for the Federal Reserve’s higher-for-longer stance.