Japan Factory Activity Expands in September

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From Trading Economics: The IHS Markit/Nikkei Japan Flash Manufacturing PMI rose to 50.3 in September of 2016 from a final 49.5 in August while market expected 49.3. It is the 1st growth since February as output increased at a faster pace while new export orders went up for the 1st time in 8 months. In contrast, new orders fell at a slower rate. Goods producers were more optimistic towards taking on additional staff, with job creation accelerating to a four-month high. Manufacturers also benefitted from lower cost burdens, with input prices declining for the ninth straight month.

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In Asian Equity Markets stocks held near 14-month highs on Friday on revived bets the Federal Reserve is settling into a phase of very gradual interest rate rises while Japanese bond yields fell after the Bank of Japan's new policy scheme. MSCI's broadest index of Asia-Pacific stocks outside Japan was steady and within sight of its highest levels since July 2015 that it hit in early September. Japan's Nikkei fell 0.1 percent, reflecting the yen's gains during Japan's market holiday on Thursday. The broader Topix was down 0.2 percent to 1,350.00 and the JPX-Nikkei Index 400 declined 0.3 percent to 12,108.56. The Australian index, S&P/ASX 200, gained 1.02 percent.

In Currency Markets the dollar gained in Asian trading on Friday but was on track to end a tumultuous week with losses after the Federal Reserve trimmed its long-term interest rate expectations and the Bank of Japan rebooted its monetary policy framework. The dollar was up 0.3 percent at 101.04 yen, pulling away from a nearly four-week low of 100.10 touched overnight though still poised to shed 1.1 percent for the week. The euro edged down 0.1 percent to $1.1201, up 1.1 percent for the week. It gained 0.3 percent against the yen to 113.24 yen, down 0.7 percent for the week. The dollar index was slightly higher at 95.456, on track to log a weekly loss of 0.7 percent.

In Commodities Markets oil prices eased on Friday, pulled down by a technical sell-off following two sessions of strong rises and on caution ahead of a gathering of OPEC ministers next week in Algeria to discuss possible production cooperation to rein in global oversupply. U.S. West Texas Intermediate crude oil futures were trading at $45.80 per barrel, down 1.12 percent, from their previous close. International Brent crude oil futures were down 0.9 percent, at $47.22 a barrel. Spot gold fell 0.2 percent to $1,334.41 an ounce and silver fell 0.6 percent to $19.72. Platinum edged up 0.3 percent at $1,054.20. Palladium was down 0.5 percent at $690.20, after rising 1.5 percent on Thursday.

In US Equity Markets  stocks climbed on Thursday, with big tech names leading broad gains, building on strength from a day earlier that was fueled by the Federal Reserve's decision to stand pat on interest rates. The Dow Jones industrial average rose 0.54 percent, to 18,392.46, the S&P 500 gained 0.65 percent, to 2,177.18 and the Nasdaq Composite added 0.84 percent, to 5,339.52.  All 11 major S&P sectors closed in positive territory, led by a 1.9-percent gain for the real estate sector. Shares of Amazon.com rose 1.9 percent to close above $800 for the first time following a price target raise by BMO. Apple shares gained 0.9 percent after positive analyst reports.

In Bond Markets U.S. Treasury yields fell on Thursday with benchmark yields hitting near two-week lows on revived bets the Federal Reserve would raise interest rates only slowly due to weak economic growth and inflation stuck below its 2-percent goal. The 10-year U.S. Treasuries yield fell to as low as 1.608 percent, down sharply from Wednesday's high of 1.738 percent and hitting its lowest level in almost two weeks. The German Bunds yield also fell about 10 basis points to minus 0.093 percent from plus 0.005 percent on Wednesday. The 10-year Japanese government bond yield fell 2.0 basis points to minus 0.050 percent while the 30-year yield fell 5.0 basis points to 0.460 percent, hitting a two-week low.

Source: Institute of Trading and Portfolio Management