Asian equity markets advanced on Friday as traders scaled back expectations for a Federal Reserve rate hike this month after Governor Christopher Waller said he would support keeping rates unchanged if price pressures continue to ease. Traders now see roughly even odds of a quarter-point Fed hike in September, down from about 70% earlier this week. Investors also continued to monitor sharp moves in the yen after the currency rallied strongly this week on expectations for more aggressive policy tightening by the Bank of Japan, while traders watched for signs of official intervention to support the Japanese currency. Shares in Japan, South Korea, China, and Hong Kong all gained, with technology stocks leading regional advances.

The Japanese yen traded around 156 per dollar on Friday after surging for two consecutive sessions, putting it on track to gain about 2.5% for its strongest weekly performance since Tokyo and Washington carried out a joint yen-buying operation in late July. There is no confirmation that this week’s rally was driven by official intervention, although traders have speculated that authorities conducted a rate check, which typically precedes intervention. Markets also weighed the prospects for more aggressive interest rate hikes by the Bank of Japan this year following hawkish remarks from central bank officials and mounting pressure from the US to support the yen through tighter monetary policy. The BOJ is expected to deliver a quarter-point rate hike this month and an additional increase in December. Elsewhere, the yen also benefited from broad dollar weakness after Federal Reserve Governor Christopher Waller said he would support keeping rates steady if price pressures continue to ease.

The annual inflation rate in the Philippines eased to 6.1% in August 2026 from 6.2% in July, but came above expectations of 6%. Food and non-alcoholic beverage inflation slowed to 4.6% from 5.2% in July, mainly due to a decline in the prices of vegetables, tubers, plantains, cooking bananas and pulses. Inflation for housing and utilities also moderated to 7.9% from 8.2%. On the other hand, transport inflation rose to 13.5% from 11.9%, reflecting renewed fuel price increases in the second half of August. Price growth also increased for alcoholic beverages and tobacco (6.3% vs. 6%), furnishings and household equipment (4.1% vs. 3.9%), and health (5% vs. 4.8%). On a monthly basis, consumer prices jumped 0.6%, the most since April, following a 0.1% gain in July and exceeding expectations of a 0.5% rise. Meanwhile, core inflation eased to 4.1% from 4.2%, in line with forecasts. Average inflation stood at 5.2% from January to August, remaining above the government’s 2%-4% target range.

Gold traded near $4,500 an ounce on Friday after rising for two consecutive sessions, as dovish comments from Federal Reserve Governor Christopher Waller led markets to scale back expectations for a September rate hike. Waller said he would favor keeping rates unchanged if price pressures continue to ease. Traders now see roughly a 50% probability of a September rate hike, down from about 63% a day earlier. Investors are also awaiting Friday’s payrolls report and next week’s inflation data for additional clues on the Fed’s policy outlook. The US dollar and Treasury yields fell sharply following Waller’s remarks, supporting bullion. Meanwhile, oil prices were on track for a strong weekly gain amid ongoing hostilities in the Middle East and heightened uncertainty over shipping through the Strait of Hormuz, keeping inflationary risks in focus.

Crude oil climbed toward $92 per barrel on Friday and was on track for a gain of around 10% this week, underpinned by renewed hostilities in the Middle East and growing uncertainty surrounding shipping through the Strait of Hormuz. The US carried out fresh strikes against Iran this week following roughly a month of relative calm, prompting Tehran to retaliate by targeting American bases in the region and vessels passing through Hormuz. Six commodity vessels transited the strait on Wednesday, down from 11 on Tuesday and compared with a 10-day average of nearly 13. Damage to refineries in the Middle East and Russia, coupled with limited capacity elsewhere to compensate for supply disruptions, is also expected to keep global fuel prices elevated into next year. Meanwhile, US diesel prices reached their highest level since mid-2022 this week, while inventories in Europe remain well below seasonal norms.

South Korea’s current account surplus narrowed to USD 42.08 billion in July 2026, down from a record high of USD 49.73 billion in June. The goods account surplus fell to USD 40.43 billion in July from USD 47.89 billion in June, with exports soaring 65.3% yoy to USD 100.45 billion, while imports rose 21.7% to USD 60.02 billion. Exports surged, boosted by strong growth in semiconductor exports amid the global AI boom. The primary income account surplus increased to USD 4.35 billion from USD 3.27 billion, driven by higher income on equity. Additionally, the secondary income deficit widened to USD 0.73 billion from USD 0.14 billion, reflecting higher secondary income payments. Meanwhile, the services account deficit rose to USD 1.97 billion from USD 1.209 billion, due to larger deficits in manufacturing services and the use of intellectual property. For the 1st seven months of 2026, the current account surplus jumped to USD 233.09 billion from USD 59.82 billion in the same period of 2025.