Asian Shares Gain on Hopes for U.S. Jobs Growth
February 7, 2014 3:06 PM EST
Asian shares regained a measure of stability on Friday, stepping further away from five-month lows after a strong rally on Wall Street and hopeful signs the upcoming U.S. payroll report could put some global growth concerns to rest.
Asian Shares Bounce from 4-week low (Reuters).
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent, a day after the index posted its biggest gains in over two months. The index bounced 2.0 percent from a five-month low hit on Wednesday.
Japan's Nikkei also rose 1.7 percent, extending its rebound from a four-month low hit earlier in the week.
Mainland China shares fell 0.2 percent from a week ago after the week-long lunar new year holiday.
A drop in applications for U.S. unemployment insurance and strong earnings helped Wall Street shares post their best day of the year on Thursday while European shares also jumped.
Initial claims for U.S. state unemployment benefits declined 20,000 last week to a seasonally adjusted 331,000, below economists' median forecast of 335,000.
While the data has no direct bearing on January's employment report, as it falls outside the survey period, it buoyed the mood after the recent rout in emerging economies raised fresh concerns about the global growth outlook.
"Risk sentiment will recover when the market can be assured that the Chinese economy is doing all right and that U.S. economic growth is firm," said Tomoaki Shishido, fixed income analyst at Nomura Securities.
For many investors who have been expecting the developed economies, especially the United States, to lead the global economy this year, solid evidence of strong U.S. job growth is vital to maintain conviction.
More so after a surprisingly downbeat report for December raised concerns U.S. growth may not be solid as some investors had hoped. Economists expect a payroll increase of 185,000 in January.
"The non-farm payrolls report is always an important release for the U.S. dollar but this month in particular, it could make or break the greenback," Kathy Lien, managing director at BK Asset Management, said in a note to clients.
Relative calm in vulnerable emerging markets over recent days also helped to ease worries some emerging economies might suffer harsh downturns if capital flight continues.
Battered currencies such as the Turkish lira and the South African rand are trading off their recent lows.
"Compared to the Latin American crisis or the Russian crisis in 1990s, most countries have large forex reserves. So I do not think we will see a major crisis this time," said Tetsuro Ii, the president of Commons Asset Management.
The euro held near a one-week high against the dollar after European Central Bank President Mario Draghi said on Thursday that the euro zone was not plagued by deflation.
He did, however, caution that the currency bloc's economy remained skewed to the downside and put markets on alert for a possible rate move in March, acknowledging that emerging-market turbulence could hit the euro zone.
The euro traded at $1.3592, having risen as high as $1.3619 on Thursday, its highest level in a week.
Improved risk appetite prompted the yen to step back further from a 10-week high hit earlier in the week when concerns over emerging markets were heightened.
The dollar traded at 102.00 yen, off a low of 100.755 yen marked on Tuesday.
Most Popular Slideshows
- Kate Middleton Suffocated in Kensington Palace, Queen Elizabeth Reported War With The Duchess [PHOTOS]
- Brad Pitt Still in Love with Ex-Wife Jennifer Aniston, Staying with Angelina Jolie for Sake of Kids, Claims Brad's Psychic
- 2014 MTV Video Music Awards: Everything To Know [PHOTOS]
- Miranda Kerr Broke Her Silence: Not Pregnant With James Packard’s Baby [PHOTOS]
Join the Conversation
- James Foley Beheading Video Has Play-Acting Portions – Video Experts Say
- Apple iPhone 6 Release Date, iPhone 6C or 6L Anticipation: Three Things Should Matter To New Phone Shoppers
- Upcoming Sony Xperia Z3 With Dual-SIM Support Gets Approved In China; Full Specifications Revealed; Amber-Coloured Xperia Z3 Tipped
- More Nexus 8/Nexus 9 Release Confirmed with More Leaks and Out of Stock Nexus 7 and 10
- James Foley: Release of Beheading Video by ISIS Meant to Attract More Recruits to Join the Cause – Intelligence
- 2015 Ford Mustang: Right-Hand Drive Pony Car To Be Available In Australia Next Year
- Google Works on Powering Up Chromebook Line to Kill Competitors, Nvidia Joins with Acer for New Killer Laptop