(Bloomberg) — Chinese technology shares led gains in Asian stocks after Alibaba Group Holding Ltd. reporting its fastest pace of revenue growth in more than a year boosted optimism toward the sector. The yen weakened past 150 per dollar.

Equities in Hong Kong and a gauge of Asian shares advanced after Alibaba surged as much as 13% on the back of its earnings. The region’s index is in line to notch a sixth straight weekly gain, the longest winning streak in almost a year. Bank of Japan Governor Kazuo Ueda signaled a readiness to quell a surge in bond yields, comments which led the yen to post its first decline in three days.

While investors remain wary about rising geopolitical tensions and a widening tariff war, Alibaba and other Chinese technology shares have surged in recent weeks on enthusiasm over DeepSeek’s artificial-intelligence model. Global funds piling into that surge have driven a $1.3 trillion rally in Chinese stocks.

“My conviction is until China makes major structural reforms, those growth spurts are gonna be short-lived,” said Ron Temple, chief market strategist at Lazard Asset Management. “You want to trade those rallies. It’s a ‘rent don’t own.’”

Alibaba Chief Executive Officer Eddie Wu said the pursuit of artificial general intelligence is now the company’s “primary objective.” The company aims to continue to develop models that “extend the boundaries of intelligence,” he told investors on a call after earnings.

The earnings and the company’s capital expenditure plans surprised the market significantly, Morgan Stanley’s chief China equity strategist Laura Wang wrote in a note.

“This development further validates our firm belief that China’s ability to participate and even lead in the AI empowered global technology competition should be reassessed and more appreciated by global investors,” she wrote.

BOJ’s Moves

Meanwhile, the yen weakened back past 150 per dollar in Friday trading after strengthening past that key level Thursday on speculation the Bank of Japan will hike interest rates sooner rather than later. Traders are pricing in a roughly 84% chance of a 25 basis point hike at the July meeting, up from a 70% chance at the start of the month, according to data compiled by Bloomberg.

On Friday, data showed Japanese inflation accelerated more than expected. Consumer prices excluding fresh food rose 3.2% from a year earlier in January, the biggest gain since June 2023. That’s supporting bets for more rate hikes by the BOJ, with traders pricing in a roughly 84% chance of a 25 basis point increase in July.

“The CPI prints, alongside the recent Q4 GDP and December wage data, justified the recent lift in BOJ rate-hike pricing,” said Carol Kong, a strategist at Commonwealth Bank of Australia. “USD/JPY can reach our end-March forecast of 149 sooner than expected.”

However, Ueda’s comments gave the market pause, as he reiterated the central bank’s long-standing commitment to supporting stable markets. The yen is underperforming all of its Group-of-10 peers, while benchmark 10-year Japanese bond yields fell 1.5 basis points.

Elsewhere, Treasuries were little changed in Asia. Treasury Secretary Scott Bessent said that any move to boost the share of longer-term Treasuries in government debt issuance is some ways off given current hurdles that include elevated inflation and the Federal Reserve’s quantitative tightening program. 

In Australia, the central bank is closely monitoring the state of the labor market as persistent tightness may signal a stronger economy, Governor Michele Bullock said, adding that policymakers aren’t “pre-committed” to any path for interest rates.

In commodities, oil headed for its biggest weekly gain since early January on increasing supply uncertainty. Gold held near a record, and is on pace for an eighth straight weekly advance, on increasing haven demand fueled by geopolitical and trade tensions, as well as concerns about the economic outlook.

Key events this week:

• Eurozone HCOB manufacturing & services PMI, Friday
• US S&P Global manufacturing & services PMI, existing home sales, consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 1:30 p.m. Tokyo time
• Japan’s Topix fell 0.2%
• Australia’s S&P/ASX 200 fell 0.3%
• Hong Kong’s Hang Seng rose 2.9%
• The Shanghai Composite rose 0.8%
• Euro Stoxx 50 futures fell 0.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0504
• The Japanese yen fell 0.4% to 150.24 per dollar
• The offshore yuan was little changed at 7.2394 per dollar

Cryptocurrencies

• Bitcoin was little changed at $98,209.14
• Ether rose 0.7% to $2,747.3

Bonds

• The yield on 10-year Treasuries declined two basis points to 4.48%
• Australia’s 10-year yield declined two basis points to 4.51%

Commodities

• West Texas Intermediate crude was little changed
• Spot gold fell 0.3% to $2,930.74 an ounce

This story was produced with the assistance of Bloomberg Automation.

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