Asian shares mostly rose on Friday, snapping two days of losses after expectations grew that US jobs data due later in the day would reinforce the need for faster US interest rate hikes.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 0.7 per cent, boosted by gains in Australia where the local benchmark climbed 1.3 per cent, led by bank stocks. Japan’s Nikkei, however, slipped 0.1 per cent.
China and Hong Kong stocks edged higher on hopes that Beijing will roll out more support measures to prioritise economic stability. Hong Kong stocks added 1.2 per cent, and Chinese blue chips edged up 0.2 per cent.
An index of Hong Kong-listed mainland property stocks jumped 4.6 per cent on media reports that Chinese policymakers plan to exclude debt accrued from acquiring distressed assets when assessing debt ratio compliance.
Investors are likely adjusting to “attractive, cheaper” Asian stocks as the year kicks off, said Jim McCafferty, joint head of APAC equity research at Nomura.
“With rates about to go up, from a global risk diversification point of view, investors are likely moving their money from US markets into Asian markets, specifically China because it’s increasingly independent of what the US does,” he said.
Futures pointed to small opening gains in Europe and the United States. Pan-region Euro Stoxx 50 futures were up 0.23 per cent and S&P 500 e-mini stock futures advanced 0.2 per cent.
US Treasury yields paused for breath in Asian hours on Friday having risen sharply this week after the Federal Reserve’s December minutes showed that a tight jobs market and unrelenting inflation could force the US central bank to raise rates more aggressively this year.
The yield on benchmark 10-year Treasury notes was last at 1.7231 per cent having reached 1.7530 per cent overnight, its highest since April 2021 and up sharply from its 2021 close of 1.5118 per cent.
The two-year yield, which is closely linked to inflation expectations, was at 0.8741 per cent just off the overnight high of 0.886 per cent.
Kerry Craig, global market strategist at JPMorgan Asset Management, said investors were waiting for US employment figures due later on Friday and inflation data due next week to see whether they would reinforce or undermine the case for faster rate hikes.
Non-farm payrolls likely increased by 400,000 jobs last month after rising 210,000 in November, according to a Reuters’ survey of economists.
Prospects of a strong employment report were boosted by the ADP National employment report on Wednesday, which showed private payrolls increased by 807,000 jobs last month.
In currency markets, higher yields meant the dollar index, which measures the greenback against six peers, has risen 0.55 per cent this week.
On Friday, the greenback held its gains against most majors while advancing 0.1 per cent on the yen which was at 115.89 per dollar, in sight of Tuesday’s five-year high of 116.34.
Oil prices rallied, which some analysts linked to news that Russian paratroopers had arrived to quell unrest in Kazakhstan, though production in the OPEC+ producer country remains largely unaffected so far.
Brent crude futures rose 0.9 per cent to $82.71 a barrel, and US crude rose 0.96 per cent to $80.2.
Spot gold stood at $1,790.01 an ounce after touching a two-week low of $1,788.25 on Thursday, as rising US Treasury yields hurt demand for the non-interest bearing metal.
Bitcoin dropped 3.4 per cent to around $41,600, its lowest since late September. – Reuters
