(Bloomberg) — Asia followed the recovery of global shares, buoyed by gains on Wall Street driven by positive signs in the US labor market and increased consumption in China.
Stocks in Japan, South Korea, and Australia all saw gains, with Chinese equities rising after data showed higher-than-expected inflation, indicating a potential uptick in domestic demand. Singapore markets remained closed.
US stock futures also rose in Asia, mirroring the rally on Wall Street where the S&P 500 had its best day since November 2022 and the Nasdaq surged 3.1%.
Investor sentiment improved following a positive US jobless claims report, easing concerns of a recession after last week’s disappointing employment data. Attention now turns to upcoming US economic indicators next week, including consumer prices.
An optimistic growth outlook for China is also boosting risk appetite.
“China can actually be outperforming when other markets are so volatile,” said Aisa Ogoshi, a fund manager at JPMorgan Asset Management Japan Ltd., in an interview with Bloomberg TV. “Policy tailwinds in the country are starting to appear.”
While the recent rebound is positive, investors are still trying to interpret mixed signals from policymakers. Federal Reserve Bank of Kansas City President Jeffrey Schmid, for example, indicated he’s not ready to support an interest rate cut with inflation above target.
In Japan, Tokyo Electron Ltd. shares surged after the company raised its profit forecast for the fiscal year and reported better-than-expected sales growth.
The yen weakened slightly against the dollar, on track for its fourth consecutive day of depreciation.
Treasuries remained stable in Asian trading after Thursday’s declines, with swap traders reducing bets on aggressive Fed easing in 2024. Cryptocurrencies rallied as investors returned to riskier assets.
Global markets saw such a sharp repricing that at one point, interest-rate swaps implied a 60% chance of an emergency rate cut by the Fed in the coming week, well ahead of the scheduled September meeting. Current pricing suggests around 40 basis points of cuts for September.
Oil prices inched up after a rally on Thursday amid tensions in the Middle East, while gold prices fell.
Meanwhile, steel and aluminum producers in Canada were calling on Prime Minister Justin Trudeau’s government to swiftly impose new tariffs on Chinese products, citing an influx of Chinese metals threatening local jobs.
Some key market movements:
Stocks
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S&P 500 futures rose 0.2% as of 12:06 p.m. Tokyo time
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Nasdaq 100 futures rose 0.3%
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Japan’s Topix rose 1.5%
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Australia’s S&P/ASX 200 rose 1.5%
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Hong Kong’s Hang Seng rose 2%
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The Shanghai Composite rose 0.3%
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Euro Stoxx 50 futures rose 0.4%
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro was little changed at $1.0921
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The Japanese yen fell 0.1% to 147.44 per dollar
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The offshore yuan rose 0.1% to 7.1768 per dollar
Cryptocurrencies
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Bitcoin rose 3% to $61,323.31
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Ether rose 4.2% to $2,678.57
Bonds
Commodities
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West Texas Intermediate crude rose 0.3% to $76.39 a barrel
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Spot gold fell 0.2% to $2,423.15 an ounce
This article was created with the help of Bloomberg Automation.
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