Japan equities and bond yields jumped after the central bank raised its policy rate to a three-decade high. The decision comes as inflation has stayed above its target levels for nearly four years now. The Bank of Japan raised benchmark rates by 25 basis points to 0.75%, their highest level since 1995, and in line with expectations of economists polled by Reuters. Japan’s consumer inflation rate dropped to 2.9% in November, government data showed Friday. Core inflation, which strips out prices of fresh food, remained unchanged from 3% in October, and came in line with Reuters-polled economists’ average estimate. Japan’s Nikkei 225 advanced 1.33%, while the Topix was 1.06% higher. The Japanese yen weakened 0.33% to 156.06 against the greenback.
The S&P 500 snapped a four-day slide on Thursday, boosted by lighter-than-expected inflation data that brightened the outlook for lower interest rates in 2026 and blowout guidance from chipmaker Micron Technology. The broad market index jumped 0.79% to settle at 6,774.76, while the Nasdaq Composite advanced 1.38% to 23,006.36. The Dow Jones Industrial Average gained 65.88 points, or 0.14%, to end the day at 47,951.85. The delayed November consumer price index report — the first since the U.S. government shutdown ended last month — showed headline annual inflation of 2.7%, according to the Bureau of Labor Statistics, below the 3.1% that economists polled by Dow Jones had expected. The 12-month rate for core CPI, which excludes food and energy, was 2.6%, was also lower than the Dow Jones forecast of 3%.
Gold traded around $4,320 per ounce on Friday, near its October record high and on track for a second weekly gain, as softer-than-expected US inflation strengthened expectations of further interest-rate cuts. November inflation slowed to 2.7%, below forecasts of 3.1%, with core CPI at 2.6%, its slowest pace since March 2021. This reinforced expectations that price pressures are easing and strengthened the case for potential Federal Reserve rate cuts. However, the data was limited by the federal shutdown, which disrupted the BLS’s collection of October prices and month-over-month analysis. Markets currently assign about a 25% chance of a rate cut in January, with near certainty by April.
WTI crude oil futures dipped below $56 per barrel on Friday, on track for a second straight weekly decline, as oversupply concerns outweighed geopolitical risks. Prices earlier this week fell to their lowest level in nearly five years, driven by expectations of ample supply as OPEC+ gradually restores shut-in capacity and non-OPEC producers boost output. Early signs of demand weakness are also emerging among major consumers, including China and the US, leaving oil down about 20% for the year. Rising geopolitical tensions have tempered losses, sparking fears of potential supply disruptions.
Japan’s central bank on Friday raised its short-term rates to a three-decade high, marching ahead with its policy normalization, as inflation has stayed above its target levels for nearly four years now. The Bank of Japan raised benchmark rates by 25 basis points to 0.75%, their highest level since 1995, and in line with expectations of economists polled by Reuters. The BOJ said that real interest rates are expected to remain “significantly negative,” adding that accommodative financial conditions will continue to firmly support economic activity. Following the decision, the yield on 10-year Japanese government bonds breached the 2% mark for the first time since 2006, while the yen weakened 0.20% to 155.79 against the dollar. The benchmark Nikkei 225 stock index gained 1.21%.
European Union countries will allocate 90 billion euros ($105.5 billion) in aid to Ukraine for 2026 and 2027, EU Council President Antonio Costa said on Friday. “We have a deal,” Costa wrote on X, confirming the package had been approved. EU governments had been debating whether to use 210 billion euros of frozen Russian assets, most of it held in Belgium, to support a so-called reparations loan for Ukraine. On Wednesday, Ukrainian President Volodymyr Zelenskyy urged EU leaders and partners to increase support and decide on using frozen Russian assets to help Ukraine, saying sustained backing was vital to keep the country resilient and to deter Russia from pressing on with the war next year.
U.S. President Donald Trump indicated Thursday that negotiations to end the conflict in Ukraine may be making progress, ahead of scheduled talks between U.S. and Russian officials this weekend. "I believe talks toward ending the war in Ukraine are getting close to something," Trump said during an Oval Office event. The president also expressed his desire for swift action from Ukraine, stating, "I hope Ukraine moves quickly."
The U.S. on Thursday approved $11.15 billion in arms sale to Taiwan, reportedly its largest deal to the island as it faces growing threats from China and has been a subject of diplomatic tensions between Beijing and Tokyo. The move drew a sharp response from Beijing, with its foreign affairs spokesperson, Guo Jiakun, accusing the U.S. of violating the “one-China principle.” “By aiding Taiwan’s independence through arms sales, the U.S. will only end up harming itself. Any attempt to use Taiwan to contain China is doomed to fail,” Guo said, according to a CNBC translation of his speech in Mandarin. The Taiwanese defense ministry said the sale — comprising artillery systems, antitank missiles, as well as spare parts for helicopters and antiship missiles — falls under the $40 billion supplementary defense budget announced by President Lai Ching-te in November.
The Bank of England voted narrowly to cut interest rates on Thursday, in its last monetary policy move of 2025. The central bank’s nine-member monetary policy committee (MPC) on Thursday voted 5-4 to trim the benchmark interest rate by 25 basis points to 3.75%, marking the fourth cut of the year. Economists had widely expected the rate trim, which comes at a time of lackluster economic data, softening labor market and a recent decline in inflation that outpaced expectations. Nonetheless, the vote was a narrow one, with BOE Governor Andrew Bailey siding with more dovish members of the committee rather than the four policymakers who maintain that the inflation rate, at 3.2% in November, is still far from the central bank’s 2% target. In a statement, the MPC said that while inflation remained above target, “it is now expected to fall back towards target more quickly in the near term.”
Consumer prices rose less than expected in November, giving investors hope that inflationary pressures may be cooling enough for U.S. monetary policy to be eased more than Wall Street anticipates. The consumer price index rose at a 2.7% annualized rate last month, a delayed report from the Bureau of Labor Statistics showed. Economists polled by Dow Jones expected the CPI to have risen 3.1%. The core CPI, which strips out volatile food and energy prices, was also cooler than anticipated, increasing 2.6% over 12 months. It was expected to have risen by 3%. The monthly increases also were less than expected, with both the all-items and core CPI gains at 0.2%, compared to estimates of 0.3%. This is the first report that encompasses the period during which the U.S. government was shut down. The stoppage disrupted the data collection process in that time.
Nike on Thursday posted quarterly earnings and revenue that topped Wall Street’s estimates, as strength in North America helped to offset a plunge in China sales. The company’s stock slid about 10% in extended trading Thursday, as investors digested the weakness in China and the sustained hit Nike is taking from higher tariffs. The sneaker company is just over a year into CEO Elliott Hill’s turnaround strategy, focusing on regaining its growth and market share, clearing out old inventory and investing in wholesale relationships. “Fiscal year ’26 continues to be a year of taking action to rightsize our classics business, return Nike digital to a premium experience, diversify our product portfolio, deepen our consumer connection, strengthen our partner relationships and realign our teams and leadership,” Hill said on a call with analysts.
TikTok CEO Shou Zi Chew told employees on Thursday that the company’s U.S. operations will be housed in a new joint venture. The entity is named TikTok USDS Joint Venture LLC, according to a memo sent by Chew and obtained by CNBC. As part of the joint venture, Chew said the company has signed agreements with the three managing investors: Oracle, Silver Lake, and Abu Dhabi-based MGX. He said that the deal’s “closing date” is Jan. 22. Under a national security law, which the Supreme Court upheld in January, China-based ByteDance was required to divest TikTok’s U.S. operations or face an effective ban in the country. In September, President Donald Trump signed an executive order approving a proposed deal that would keep TikTok operational in the U.S. by meeting the requirements of a law originally signed by former President Joe Biden.
Shares of ICICI Prudential, one of India’s largest asset management companies, rose 20% in their trading debut Friday, following a 106 billion rupees ($1.17 billion) initial public offering. The IPO by the firm jointly owned by India’s ICICI Bank and UK’s Prudential, was priced at 2,165 rupees per share at the upper end of the price band. The issue was subscribed more than 39 times during the bidding process, driven primarily by a strong demand from institutional investors. Retail portion of the IPO was subscribed just 2.5 times. Singapore’s GIC and Temasek and India’s public sector insurance company Life Insurance Corporation were among the major institutional investors that participated in the IPO. Citigroup Global Markets India, BofA Securities India, Morgan Stanley, Axis Capital, Avendus Capital and ICICI Securities were among the joint bookrunners.
Citigroup took another step toward fixing its longstanding compliance problems, announcing on Thursday that a U.S. bank regulator had removed part of a sweeping punishment requiring the bank to tackle its issues. The nation’s third-largest bank said the Office of the Comptroller of the Currency had withdrawn a 2024 amendment to a 2020 consent order. The original order, which remains in effect, requires the bank to increase its efforts to address longstanding operational and risk management issues after struggling to show progress. "Our transformation has been our number one priority, and we are dedicating the resources necessary to modernize our systems and strengthen our risk and control environment," the bank said in a statement. The move, while incremental, is another step in the right direction for the bank, which has laboured for years to satisfy regulatory concerns about its management.