Asian stocks are rising while investors wait for US job data

Monitors showing stock index prices and Japanese yen against the US dollar are seen after the New Year’s ceremony marking the opening of trading in 2022 on the Tokyo Stock Exchange (TSE), amid the coronavirus pandemic (COVID-19), in Tokyo, Japan January 4, 2022 REUTERS / Issei Kato

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HONG KONG, JANUARY 7 (Reuters) – Asian stocks took two days of losses on Friday, climbing while investors waited to see if US job data coming later in the day would amplify the need for faster US rate hikes.

MSCI’s broadest index of Asia-Pacific equities outside Japan (.MIAPJ0000PUS) rose 0.3%, strengthened by a 1.2% rise in the Australian benchmark index (.AXJO) where bank stocks were in the foreground, although Japanese Nikkei (.N225 ) gave up early gains to fall 0.66%.

Nasdaq futures rose as much as 0.5% in previous Asian trading before giving up some gains to trade 0.25% higher, and S&P 500 e-mini stock futures rose 0.17%.

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A key market driver this week has been the rise in US interest rates following the publication of the Federal Reserve’s December report, said Kerry Craig’s global market strategist at JPMorgan Asset Management.

The minutes, published on Wednesday, had shown that a tight labor market and incessant inflation could force the US Federal Reserve to raise interest rates more aggressively this year.

“Even though we saw returns slow down a bit at the end of the session, stock futures are ticking up, and now we’re also seeing it at the Asia Open,” Craig said.

The yield on the benchmark index for 10-year government bonds was last at 1.7211% after reaching 1.7530% overnight, the highest since April 2021, up sharply from the end of 2021 to 1.5118%.

The two-year interest rate, which is closely linked to inflation expectations, was 0.8656% close to the highest night of 0.886%.

JPMorgan’s Craig said investors were waiting for US non-farm wage data due later on Friday, and inflation data to come next week, to see if they would amplify or undermine the case for faster US rate hikes.

The higher returns have hurt technology stocks this week as investors rotated to stocks in companies that are doing well in a higher interest rate environment, such as banks.

MSCI’s Asian benchmark, which gives significant weight to several big technology names, is 1.1% lower this week, although technology shares managed to rise on Friday, especially South Korea’s Samsung Electronics Co Ltd (005930.KS). Samsung shares rose 1.4% after the company reported its best quarterly operating profit in four years. read more

Overnight, US equities had fallen slightly with rising interest rates, but losses were more subdued compared to the sharper fall earlier in the week.

In the foreign exchange markets, higher interest rates meant that the dollar index, which measures the dollar against six peers, has risen 0.63% this week.

On Friday, the dollar rose against most majors as it rose 0.1% on the yen at 115.94 per dollar, ahead of Tuesday’s five-year high of 116.34.

The price of oil rose, which some analysts linked to the news that Russian paratroopers had arrived to quell the unrest in Kazakhstan, although production in the OPEC + producer country remains largely unaffected so far. read more

Brent oil futures rose 0.6% to $ 82.48 a barrel, and US oil rose 0.6% to $ 79.96.

Spot gold rose 0.15% to $ 1,791.85 per ounce after reaching a two-week low of $ 1,788.25 on Thursday, as rising US government interest rates hurt demand for non-interest-bearing metal.

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Reporting by Stella Qiu in Beijing, Kanupriya Kapoor in Singapore and Alun John in Hong Kong; Edited by Kenneth Maxwell

Our standards: Thomson Reuters Trust Principles.

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