Hong Kong (AFP/APP): Asian markets posted gains in early trade Friday, shrugging off Wall Street losses ahead of key US jobs data. Analysts say signs of a robust American economy, such as strong labour market data this week, are bad news for equities as it gives the Federal Reserve more reason to keep monetary policy tight through to the end of the year and beyond.
US Treasury yields hit their highest levels since 2007 this week as investors fear that high borrowing costs for businesses and consumers will eventually drag on the economy. All eyes are on Friday’s monthly US employment data, which will give investors a good idea of whether recent signs of a softening in the labour market will continue.
“Stock investors are not playing” with the drop in 10-year US yields, and “worries about a hot Non-Farm Payroll are upping the uncertainty index”, Stephen Innes of SPI Asset Management said. On Thursday, the Dow Jones Industrial Average finished flat, while the S&P 500 and Nasdaq index ticked lower. But Hong Kong started Friday on the front foot, with early gains of just over 1.5 percent, while Tokyo crept higher. Singapore, Seoul and Mumbai were also up, while mainland Chinese markets were closed for a week-long holiday.
“If there’s any signs of the labour market cracking then that would obviously be positive and maybe could send stocks a little bit higher,” Peter Cardillo from Spartan Capital told AFP. “The markets sell-off which saw government bond prices fall and yields rise has taken centre stage this week, and investors continue to watch the 10-year Treasury yield like a hawk,” said AJ Bell investment director Russ Mould. Tokyo markets open lower: Tokyo stocks opened lower on Friday, following slight losses on Wall Street as investors braced for key US jobs data. The benchmark Nikkei 225 index was down 0.11 percent, or 35.01 points, at 31,040.35 in early trade, while the broader Topix index lost 0.07 percent, or 1.62 points, to 2,262.14.
The dollar stood at 148.52 yen, against 148.50 yen seen in New York on Thursday. The Tokyo market started the trading day slightly lower, taking its cue from a lacklustre finish on Wall Street ahead of an all-important US payrolls report. “Stock investors are not playing” with the drop in 10-year US yields, and “worries about a hot Non-Farm Payroll are upping the uncertainty index”, Stephen Innes of SPI Asset Management said.
In Japan, the market “was seen starting moving within a narrow range, after small falls on Wall Street”, senior strategist Toshiyuki Kanayama of Monex said. “As a wait-and-see mood tends to take hold of traders ahead of the US jobs data, the key point today will be whether the (Nikkei index) can maintain the 31,000 level that it had recovered to yesterday,” he added. Shortly before the opening bell, an internal affairs ministry survey showed Japan’s household spending in August dropped a real 2.5 percent year-on-year — its sixth consecutive fall. Among major shares in Tokyo, SoftBank Group trimmed 0.39 percent to 6,058 yen, Toyota gave up 1.44 percent to 2,552.5 yen, and Uniqlo operator Fast Retailing shed 0.85 percent to 31,480 yen. Sony Group, meanwhile, added 0.08 percent to 12,330 yen.
