Asia shares strike seven-month high ahead of US jobs data
Asian stocks rose to a seven-month peak on Friday, tracking global peers as investors cheered the prospect of an imminent rate easing cycle led by major central banks, keeping the dollar and Treasury yields under pressure.
Japan remained an outlier as expectations mount that the Bank of Japan (BOJ) could finally exit negative interest rates this month. That lit a fire under the yen and sent domestic bond yields rising.
MSCI's broadest index of Asia-Pacific shares outside Japan peaked at 538.47 points in early Asia trade, its strongest level since August. It was last 1% higher, and was eyeing a weekly gain of nearly 2%.
Global stock indexes had in the previous session rallied to record highs after the European Central Bank (ECB) laid the ground for a potential rate cut in June, while Federal Reserve Chair Jerome Powell struck a similar tone on the path of U.S. rates.
«Very seductive words when it is uttered by the Fed Chair, it appears, in the context of confidence to initiate rate cuts,» said Vishnu Varathan, chief economist for Asia ex-Japan at Mizuho Bank. «Markets were certainly not shy in construing this as an open invitation to pivot-type rallies.»
The two-year U.S. Treasury yield, which typically reflects near-term rate expectations, fell to a one-month low of 4.499% on Friday as traders added to bets of imminent Fed rate cuts.
The benchmark 10-year yield was last at 4.0923%.
Focus now turns to the closely watched nonfarm payrolls report due later on Friday for further clues on the U.S. rate outlook,
