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 4:47 p.m. EST (2047 GMT)
Global stocks were higher on Friday as Big Tech gains lifted Wall Street shares, while Japan's yen sank to a 34-year low after the Bank of Japan (BOJ) kept monetary policy loose.
MSCI's gauge of stocks across the globe .MIWD00000PUS rose 6.80 points, or 0.90%, to 762.39 on 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 S&P 500 and the Nasdaq registered their biggest weekly percentage gains since early November 2023.
The Dow Jones Industrial Average .DJI rose 153.86 points, or 0.40%, to 38,239.66, the S&P 500 .SPX gained 51.54 points, or 1.02%, to 5,099.96 and the Nasdaq Composite .IXIC gained 316.14 points, or 2.03%, to 15,927.90.
Europe's benchmark stock index had its biggest daily gain in more than three months, closing up 1.2%, on gains in banking and industrial stocks. The technology sector got a boost from upbeat results from U.S. megacaps.
The dollar hit 158.275 yen JPY=EBS , the highest since June 1990.
World equities were poised to finish the month lower, as hopes of rapid Fed rate cuts receded following a series of U.S. inflation readings.
The Bank of Japan kept interest rates around zero at its policy meeting, despite forecasting inflation of around 2% for three years.
Markets are braced 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."
YIELDS FALL Longer-dated U.S. Treasury yields fell after data showed inflation gains in March in line with economists’ expectations.
The yield on benchmark U.S. 10-year notes US10YT=RR fell 4.3 basis points to 4.663%, 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 0.5 basis points to 4.9934%, 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 fell 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.
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 0.21% to $2,336.79 an ounce. U.S. gold futures GCcv1 settled 0.2% higher at $2,347.20.
Brent crude futures LCOc1 settled up 49 cents, or 0.55%, to $89.50 a barrel. U.S. West Texas Intermediate crude futures CLc1 settled up 28 cents, or 0.34%, to $83.85 a barrel.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 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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