HONG KONG: Asian markets fluctuated Friday as traders tried to track a Wall Street rally ahead of key US jobs data, while Tokyo took a hit from an extended yen rally on bets Japan will drop its ultra-loose monetary policy.
A volatile week looked set to end on a positive note as a series of figures showed the US labour market and economy were slowing, fuelling speculation the Federal Reserve will be able to slash interest rates in early 2024.
Hopes for a lower rate environment were behind a stock rally in November, though December has been a little tougher due to worries the buying may have been overdone.
There is also some reticence among traders due to concerns that the weaker economic readings suggest the world’s number top economy could tip into recession.
Friday’s data come as inflation continues to come down and US job openings and private payrolls slowed last month.
Jose Torres at Interactive Brokers said that the jobs report is expected to provide additional indications of the labour market softening, a welcome sign for employers.
Impacts on markets
He said that its impact on markets, however, will depend on whether investors deem the figures as a stepping stone to a March rate cut and soft landing, or an adverse effect on consumer spending and a sharper economic slowdown.
Three main indexes on Wall Street ended on a strong note, led by the Nasdaq as tech giants outperformed.
But Asia was unable to maintain the momentum, with Shanghai and Hong Kong fluctuating, while Seoul, Singapore, Sydney, and Taipei rose and Wellington fell.
Tokyo was the key loser, dropping more than 1% as the yen continued its rampage against the dollar, which hurts exporters.
The currency surged almost 4% at one point Thursday after Bank of Japan boss Kazuo Ueda said handling monetary policy will become even more difficult from the year-end and heading into next year.
