Hong Kong: Japanese shares rallied on Friday as the dollar surged against the yen ahead of key US jobs data, while Asian energy firms were mixed following another sharp sell-off in oil.
With the Federal Reserve all but certain to hike US interest rates at a much-anticipated meeting next week the non-farm payrolls release later in the day will be pored over for clues on bank policymakers’ plans for the rest of the year.
The anticipation sent the dollar bursting past 115 yen on Thursday for the first time since the end of January and it managed to hold on in early Asian business, providing rich picking for Japanese traders buying the country’s exporters.
Tokyo’s Nikkei ended up 1.5 per cent, having broken a four-day losing streak on Thursday.
“Now the market appears convinced that the Fed will raise the rate, while investors are expecting encouraging US payroll figures,” Toshikazu Horiuchi, a broker at IwaiCosmo Securities, said. “All in all, Tokyo market sentiment is positive.”
The dollar also extended gains against the struggling pound, while it managed to temper a rally in the euro which got a shot in the arm after European Central Bank boss Mario Draghi offered an upbeat outlook for the euro zone economy.
The ECB upped its growth and inflation forecasts for this year while Draghi signalled it no longer sees an urgent need to undertake any extra support measures, meaning there would be no increase in euros being pumped into the system.
“Upgraded inflation forecasts and changed language from the ECB are signs the conversation is changing in Europe,” said Greg McKenna, Chief Market Strategist at AxiTrader.
“It was a subtle shift but an important one because even though the ECB president and his governing council keep their guidance... relatively unchanged, their upgraded economic forecasts for the EU show that the worst of the euro crisis looks to be behind the 27-nation bloc.”
Hong Kong rose 0.2 per cent in the afternoon, Sydney added 0.6 per cent and Singapore climbed 0.5 per cent but Shanghai slipped 0.1 per cent.
Seoul put on 0.3 per cent as investors were unmoved by news that President Park Geun-Hye’s impeachment had been upheld by a Constitutional Court, making her the country’s first head to be sacked in such a way. The country’s won currency was up slightly.
Another sharp loss in oil prices Thursday fuelled fresh selling in Asia’s energy firms but there were recoveries for some as the day progressed. Hong Kong-listed CNOOC and PetroChina each fell almost two per cent and Rio Tinto lost two per cent in Sydney but Inpex added 1.1 per cent in Tokyo and Sydney-listed Woodside Petroleum was 0.5 per cent up.
West Texas Intermediate shed two per cent and Brent lost almost as much, having both plunged more than five per cent Wednesday on renewed worries about a global supply glut, increased US production and questions about an Opec-Russia led drive to cut output.
Both main contracts rose about 0.7 per cent on Friday. — AFP
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