(Bloomberg) -- Asian shares rose on Friday after signs of resilience in the labor market lifted US stocks.
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Equities in Japan, South Korea and Australia climbed alongside Hong Kong futures. Gains for the Topix index further eroded the steep declines earlier in the week, helped along by Friday moves in tech and bank stocks.
US stock futures turned flat after early gains in Asia trading, following a rally on Wall Street on Thursday. The S&P 500 had its best day since November 2022, while the Nasdaq advanced 3.1%.
The better sentiment came after US jobless claims that showed fewer people applied for unemployment benefits than expected. The data alleviated concerns about the labor market after worse-than-expected jobs data on Friday last week fanned fears of recession that rippled through global markets.
“It has been quite a week,” said Liz Young Thomas at Social Finance Inc. “Up, down, and all around. We learned how sensitive markets now are to cooler US economic data, how broad reaching the impact of the yen carry trade can be, and how conditioned investors are to expect interest rate cuts as the salve for every scrape.”
It remains to be seen how long the latest rebound can last as investors continue to digest different signals from policymakers. For one, Federal Reserve Bank of Kansas City President Jeffrey Schmid indicated he’s not ready to support a reduction in interest rates with inflation above the target, according to comments made on Thursday in the US.
In Japan, shares in Tokyo Electron Ltd. jumped after the company lifted its profit forecast for the fiscal year to March and reported a better-than-expected surge in sales.
The yen weakened slightly against the dollar early Friday, on pace for its fourth day of depreciation against the greenback. The weakening removed a headwind for Japanese stocks, which can often fall when the yen rises.
Treasuries were steady in Asian trading after declines across the curve Thursday. Swap traders further trimmed bets on aggressive Fed easing in 2024. Cryptocurrencies surged, with investors returning to riskier assets across financial markets. Australian government bonds fell early Friday.
The global repricing has been so sharp that at one point interest-rate swaps implied a 60% chance of an emergency rate cut by the Fed in the coming week — well before its next scheduled meeting in September. Current pricing suggests about 40 basis points of cuts for September.
Elsewhere in Asia, China’s inflation and producer prices are due, while money supply and new lending data could be released as soon as Friday. Markets are closed in Singapore.
Soft Chinese inflation figures may fuel demand for government bonds, keeping yields near record lows, Bloomberg Economics noted, adding to speculation that the People’s Bank of China may continue to reduce rates to support the economy.
Oil edged lower following a Thursday rally, against the backdrop of simmering tensions in the Middle East. Gold fell after a gain in the prior session.
Meanwhile, steel and aluminum producers in Canada were urging Prime Minister Justin Trudeau’s government to swiftly impose new tariffs on Chinese products, saying metals from the Asian powerhouse are flooding the Canadian market and threatening local jobs.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 9:55 a.m. Tokyo time
Hang Seng futures rose 1.5%
Japan’s Topix rose 1.6%
Australia’s S&P/ASX 200 rose 0.6%
Euro Stoxx 50 futures were unchanged
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.0913
The Japanese yen fell 0.2% to 147.51 per dollar
The offshore yuan was little changed at 7.1879 per dollar
Cryptocurrencies
Bitcoin rose 3% to $61,344.26
Ether rose 4.4% to $2,685.18
Bonds
The yield on 10-year Treasuries declined one basis point to 3.98%
Japan’s 10-year yield declined 3.5 basis points to 0.840%
Australia’s 10-year yield advanced two basis points to 4.08%
Commodities
West Texas Intermediate crude fell 0.2% to $76.01 a barrel
Spot gold fell 0.2% to $2,423.43 an ounce
This story was produced with the assistance of Bloomberg Automation.
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