Asian markets rose yesterday after a strong Wall Street rally sparked by upbeat figures on the US labour market ahead of the release of crucial jobs data.
The euro held up after enjoying a rally on Thursday in response to the European Central Bank’s decision to keep interest rates unchanged, despite fears of deflation in the eurozone.
Tokyo climbed 2.17%, or 307.29 points, to 14,462.41, Sydney closed 0.68%, or 35.1 points, higher at 5,166.5 and Seoul added 0.77%, or 14.61 points, to close at 1,922.50.
Hong Kong rose 1.00%, or 213.72 points, to end at 21,636.85, while Shanghai—on its first day open after a week-long Lunar New Year holiday—closed up 0.56%, or 11.42 points, at 2,044.50.
In other markets, Jakarta rose 0.95%, or 41.96 points, to 4,466.67; Indocement Tunggal Prakarsa gained 1.30% to 21,500 rupiah, while Hero Supermarket rose 1.79% to 2,840 rupiah.
Kuala Lumpur gained 0.59%, or 10.69 points, to 1,808.59; Tenaga Nasional rose 2.62% to 11.74 ringgit while IHH Healthcare gained 1.67% to 3.66 ringgit.
Manila rose 1.63%, or 96.55 points, to 6,011.14; Philippine Long Distance Telephone Co rose 1.69% to 2,648 pesos while Alliance Global Group Inc jumped 0.19% to 27.05 pesos.
Singapore added 0.83%, or 24.87 points, to 3,013.14; Singapore Telecom rose 0.86% to Sg$3.51 while United Overseas Bank was up 1.38% at Sg$19.88. Taipei added 0.92%, or 76.34 points, to 8,387.35; Taiwan Semiconductor Manufacturing Co was up 1.96% at Tw$104.0 while Hon Hai fell 0.61% to Tw$81.4. Wellington rose 0.68%, or 32.85 points, to 4,840.79; Chorus jumped 7.9% to NZ$1.49 and Contact Energy was steady at NZ$5.25.
Bangkok rose 0.10%, or 1.25 points, to 1,296.49; coal producer Banpu added 0.93% to 27.25 baht, and energy gaint PTT jumped 4.0% to 286.00. At the end of a week that started with turmoil in global markets, traders were a lot calmer hours before the US Labor Department reports its non-farm payrolls data for January.
“The upcoming jobs data is viewed as critical for markets, which are pricing in further growth. So any hints that they might be good are positive for sentiment,” said Mutsumi Kagawa, senior strategist at Tokai Tokyo Research Center.
The figures will be used as a gauge for the strength of the US economy and have taken on huge significance since the Federal Reserve began winding down its stimulus programme from last month.
Its decision last week to reduce the bond-buying scheme further this month sent world markets into a tailspin as investors fretted about the impact on emerging markets.
Hopes of an upbeat set of figures yesterday were boosted by data Thursday showing new claims for US unemployment insurance benefits, which indicate the pace of layoffs across the economy, fell back last week. In New York the Dow gained 1.22%, the S&P 500 added 1.24% and the Nasdaq tacked on 1.14%.
But kabu.com chief strategist Tatsunori Kawai told Dow Jones Newswires: “A weak number could trigger another market sell-off.”
On currency markets the dollar sat at 102.05 yen yesterday, after climbing in New York to 102.10 yen. However, it is well above the mid-101 yen range in Tokyo earlier Thursday.
The US Labor Department’s report of January data on job creation and unemployment early yesterday “could make or break the greenback”, said Kathy Lien of BK Asset Management.
The euro bought $1.3583 and 138.65 yen against $1.3591 and 138.79 yen. However it is much stronger than the $1.3517 and 137.16 yen in Tokyo on Thursday. Europe’s single currency rallied on Thursday after the central bank kept rates at 0.25% and its head Mario Draghi brushed off talk that deflation was becoming a threat despite prices rising marginally in recent months.
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