Picture: 123RF/DANIIL PESHKOV
Picture: 123RF/DANIIL PESHKOV

Hong Kong — Asian shares snapped two days of losses on Friday, climbing as investors waited to see whether US jobs data due later in the day would reinforce the need for faster  interest rate hikes there.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3%, boosted by a 1.2% gain in the Australian benchmark, where bank stocks were to the fore. Japan’s Nikkei gave up early gains to slip 0.66%.

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

A key market driver this week has been the rise in US yields after the publishing of the Federal Reserve’s December minutes, said Kerry Craig, global market strategist at JPMorgan Asset Management.

The minutes, published on Wednesday, showed that a tight jobs market and unrelenting inflation could force the US central bank to raise rates more aggressively this year.

“Though we saw yields come off a little at the end of the session, share futures tick up, and now we’re seeing that at the Asia open too,” said Craig.

The yield on benchmark 10-year treasury notes was last at 1.7211%, having reached 1.753% overnight, its highest since April 2021 and up sharply from its 2021 close of 1.5118%. The two-year yield, which is closely linked to inflation expectations, was at 0.8656% just off the overnight high of 0.886%.

Craig said investors were waiting for US non-farm payroll data due later on Friday and inflation data due next week to see whether they would reinforce or undermine the case for faster rate hikes in the US.

The higher yields have hurt tech shares this week as investors rotated into shares of companies that do well in a higher-rate environment, like banks.

MSCI’s Asian benchmark, which gives significant weight to several large tech names, is off 1.1% this week, though tech stocks did manage to rally on Friday, notably South Korea’s Samsung Electronics. Samsung stock rose 1.4% after the company reported its best quarterly operating profit in four years.

Overnight, US shares had slipped slightly along with the rising yields, but losses were more muted compared with the sharper falls earlier in the week.

In currency markets, higher yields meant the dollar index , which measures the greenback against six peers, has risen 0.63% this week.

On Friday, the greenback held its gains against most majors while advancing 0.1% on the yen, which was at ¥115.94/$, in sight of Tuesday’s five-year high of ¥116.34.

Oil prices rallied, which some analysts linked to news that Russian paratroopers had arrived to quell unrest in Kazakhstan, though output in the oil producer remains largely unaffected so far.

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

Spot gold rose 0.15% to $1,791.85/oz after touching a two-week low of $1,788.25 on Thursday, as rising US treasury yields hurt demand for the non-interest bearing metal.

Reuters

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