(MENAFN- Live Mint) Japan Stocks are set to rebound Thursday after the nation's new prime Minister dimmed hopes of another interest-rate hike. Treasuries slid and the dollar climbed on signals the US may slow its easing.
The yen suffered its worst day against the greenback since June 2022 after Shigeru Ishiba said the Economy isn't ready for another interest-rate hike. The currency was steady at around 146 per dollar Thursday, its weakest level in a month, after falling 2% in the prior session.
Futures contracts for Japanese stocks, which typically rise when the yen falls, climbed 2.5%. Contracts for Hong Kong and Australian equities were flat early Thursday, while S&P 500 futures edged higher after the index ended Wednesday little changed. A gauge of US-listed Chinese companies rose almost 5% after mainland stocks listed in Hong Kong jumped Wednesday.
Renewed vigor in the greenback added to the pressure on the Japanese currency as strong jobs data led traders to pare bets on aggressive Federal Reserve cuts. Swaps traders were penciling in some 33 basis points of policy easing at the central bank's November meeting, down from 44 basis points just last week.
Oil rose for a third day in early Asian trading as investors await Israel's response to Iran's missile attack, with US President Joe Biden urging Israel to hold off from attacking Iran's nuclear facilities.
An index of dollar strength rose on Wednesday as Treasury yields climbed. The 10-year yield rose five basis points to 3.78% after hitting a low of 3.69% in the prior session amid the flare-up of tensions in the Middle East.
Data Wednesday showed US companies added more jobs than expected last month, at odds with other indicators that show a cooling labor market. Friday's nonfarm payrolls numbers will be the next critical gut check on the health of workers and the US economy.
“Today's ADP employment number surprised to the upside, suggesting the labor market is bending but not breaking,” said Chris Larkin at E*Trade from Morgan Stanley.“Friday's monthly jobs report will have the final word on the current jobs picture, and more than likely, on near-term market sentiment.”
In Asia, Bank of Japan official Asahi Noguchi is set to speak Thursday, while data set for release includes Singapore S&P Global PMI figures and Jibun Bank PMI composite data. Markets are closed in mainland China and South Korea.
US Jobs
The US nonfarm payroll report won't take a half a percentage point cut off the table, according to Bank of America Corp. strategists led by Meghan Swiber.
“Even if the labor market surprises to the strong side, pricing will still maintain optionality,” they wrote.
To Marc Rowan, the chief executive officer of Apollo Global Management Inc., the Fed's aggressive policy easing threatens to overstimulate the economy.
“It is not clear we need more rate cuts,” he said in an interview with Bloomberg Television, pointing to ready financing and rising real estate prices.
To Marc Rowan, the chief executive officer of Apollo Global Management Inc., the Fed's aggressive policy easing threatens to overstimulate the economy.
“It is not clear we need more rate cuts,” he said in an interview with Bloomberg Television, pointing to ready financing and rising real estate prices.
Richmond Fed President Thomas Barkin, meanwhile, said it was too early for the central bank to declare victory over rising prices.“While we have made real progress - there remains significant uncertainty on both inflation and employment,” he said.
Key events this week:
Some of the main moves in markets:
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Commodities
This story was produced with the assistance of Bloomberg Automation.
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