(Bloomberg) — The recovery in global stocks continued in Asia, following gains on Wall Street after signs of resilience in the U.S. labor market eased recession fears.
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From Japan to South Korea to Australia, stock prices rose. While Hong Kong stocks held on to gains, mainland Chinese equities lost momentum as perceptions grew that better-than-expected inflation was largely due to seasonal factors such as weather. In Singapore, markets are closed.
U.S. stock futures rose in Asia following a rally on Wall Street on Thursday. The S&P 500 posted its best day since November 2022, while the Nasdaq rose 3.1%.
The dollar slipped and an indicator of emerging market currencies rose to its highest since April 2022. Government bond yields in Asia declined slightly after a three-day rise.
Risk appetite has increased after an improved US unemployment report eased fears of a recession triggered by last week’s worse-than-expected employment data. The focus will now turn to a new set of US economic indicators due out next week, including consumer prices.
“The storm clouds have cleared for now” for Asian markets, said Tony Sycamore, market analyst at IG Australia. “I think we’re going up now until we see another growth scare, but Japan could fall off investors’ radar for a while.”
It remains to be seen how long the recent recovery will last as investors continue to react to mixed signals from policymakers. For example, Federal Reserve Bank of Kansas City President Jeffrey Schmid indicated he would not be willing to support a rate cut if inflation was above target, according to comments in the U.S. on Thursday.
Swap traders have continued to reduce their bets on an aggressive Fed rate cut in 2024. The global re-rating has been so strong that at one point interest rate swaps implied a 60% chance of an emergency Fed rate cut in the coming week – well before its next scheduled meeting in September. The current valuation suggests a cut of around 40 basis points for September.
In Japan, shares of Tokyo Electron Ltd. jumped after the company raised its profit forecast for the fiscal year ending March and reported a bigger-than-expected rise in sales.
The yen weakened against the dollar after three days of weakening.
Against the backdrop of simmering tensions in the Middle East, oil prices rose slightly after a rally on Thursday. Gold prices fell.
Meanwhile, Canadian steel and aluminum producers urged Prime Minister Justin Trudeau’s government to quickly impose new tariffs on Chinese products, saying metals from the Asian industry were flooding the Canadian market and threatening local jobs.
Important events this week:
Some of the key market movements:
Shares
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S&P 500 futures rose 0.2% at 1:15 p.m. Tokyo time
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Nasdaq-100 futures rose 0.3 percent
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Japan’s Topix rose 1%
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Australia’s S&P/ASX 200 rose 1.3%
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Hong Kong’s Hang Seng rose 1.8%
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The Shanghai Composite rose 0.1%
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Euro Stoxx 50 futures rose 0.4%
Currencies
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The Bloomberg Dollar Spot Index fell 0.2 percent
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The euro was little changed at 1.0922 dollars
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The Japanese yen remained almost unchanged at 147.16 per dollar.
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The offshore yuan rose 0.2% to 7.1664 per dollar.
Cryptocurrencies
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Bitcoin rose 2.8% to $61,211.98
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Ether rose 4.7% to $2,692.46
Bonds
Raw materials
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West Texas Intermediate crude oil rose 0.2 percent to $76.33 a barrel
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The spot price of gold fell 0.3 percent to $2,421.39 per ounce.
This story was created with the assistance of Bloomberg Automation.
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