BackAsian stocks edge up on Wall Street gains, dollar wobbles before US jobs data
MSCI Asia-Pacific index up 0.1%; Asian markets subdued ahead of closely-watched US jobs data
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Tokyo: Asian equities edged up on Friday, taking early inspiration from an overnight rise on Wall Street, while the dollar wobbled ahead of the closely watched US jobs report.
MSCI’s broadest index of Asia-Pacific shares outside Japan crept up 0.1%. The index was on track to end the week 0.3% lower.
US stocks eked out a second straight day of gains on Thursday as a weaker dollar helped materials shares by lifting commodity prices, though disappointing forecasts from retailers and anxiety ahead of Friday’s non-farm jobs report limited the advance. The Dow rose 0.5% and the S&P 500 gained 0.2%.
The dollar remained firmly on the back foot after being hit this week by lacklustre economic data and dovish comments from some Fed officials that curtailed expectations of a near-term US interest rate hike.
The dollar stood little changed at ¥116.84 after sinking 1% overnight. The greenback, which soared to close to ¥122 recently, was heading for a 3.5% loss on the week. It was poised to hand back all the gains made on the Bank of Japan’s surprise decision last Friday to adopt negative interest rates.
The euro was steady at $1.1200 and headed for a 3.4% gain on the week, its biggest in more than four years.
The markets will look to the US jobs data to set direction, with the employment report expected to show employers adding 190,000 jobs in January, the median estimate of 108 economists polled by Reuters.
“Markets seem so determined to price out the risk of a Fed rate hike any time soon that it is hard to imagine a January US employment outcome strong enough to reignite pricing for March or June. Even after the US dollar’s sharp fall in recent days, there still seems to be greater scope for a USD fall on a weak reading than for a rally on a strong outcome," wrote Sean Callow, a senior strategist at Westpac.
The dollar index stood at 96.568 after stooping to 96.259 overnight, its lowest since late October.
Crude oil prices dipped, trimming some of the gains made earlier in the week that had brought some relief to risk asset markets.
US crude extended overnight losses and was last down 0.6% at $31.53 a barrel as doubts over major oil producers agreeing to joint output cut overshadowed the positive effects of a weaker dollar.
Spot gold hovered near a 3-month high of $1,157.20 an ounce , having soared this week on diminished prospects of the Fed raising rates soon. Higher interest rates would in theory reduce the appeal of non-yielding gold. Reuters
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