Asia tracks Wall St higher, dollar advance slows before jobs data

TOKYO: Asian equities followed Wall Street’s gains overnight and edged higher on Friday while the dollar’s advance slowed ahead of the US jobs report due later in the session.
Spreadbetters expected European stocks to start flat to slightly higher, forecasting Britain’s FTSE to open unchanged, Germany’s DAX to start 0.2 per cent higher and France’s CAC to open up 0.2 per cent.
The nonfarm payrolls report is the last before the US Federal Reserve’s next policy meeting and may influence the timing of the Fed’s rate hike.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent.
Australian shares added 0.2 per cent while South Korea’s KOSPI and Japan’s Nikkei were little changed.
Chinese shares gained after the private Caixin manufacturing purchasing managers index showed the country’s August manufacturing activity expanded at the fastest pace in six months.
Shanghai was up 0.5 per cent and Hong Kong’s Hang Seng rose 0.3 per cent.
Wall Street shares closed higher overnight as investors responded to strong economic data and drew some cautious hope from the Trump administration’s latest promises for long-awaited details of a tax reform plan.
US consumer spending rose slightly less than expected in July and annual inflation advanced at its slowest pace in more than 1-1/2 years, diminishing expectations of an interest rate increase in December.
The dollar’s recent advance slowed as rate hike expectations were dented. The greenback was up 0.05 per cent at 110.030 yen having gone as high as 110.675 overnight, its strongest in two weeks.
The euro was 0.1 per cent lower at $1.1895 after plumbing a one-week trough of $1.1823 overnight.
The financial markets looked to the US jobs report due at 1230 GMT for further clues on the state of the world’s largest economy. Economists polled by Reuters expect US nonfarm payrolls increased by 180,000 jobs in August after surging 209,000 in July and average hourly earnings to have increased 0.2 per cent after rising 0.3 per cent in July.
“The wages component of the jobs report will be key. If earnings are to have picked up along with employment, we will see a straightforward reaction with US stocks and yields rising and the dollar being bought,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo. The dollar index against a basket of six major currencies was steady at 92.716.
The index slipped about 0.2 per cent on Thursday and was poised to end 0.1 per cent lower on the week in which it hit a 2-1/2 year low of 91.621 on geopolitical tensions before bouncing back.
In commodities, crude futures fell, partly reversing sharp gains from the previous session, amid ongoing turmoil in the oil industry with nearly a quarter of US refining capacity offline.
Hurricane Harvey, which brought record flooding to Texas, has shut down at least 4.4 million barrels per day of refining capacity, according to company reports and Reuters estimates.
“It looks like everyone thinks that the hurricane will affect refining more than production,” said Tony Nunan, Oil Risk Manager at Mitsubishi Corp.
“Production will come back faster than refining so it is just going to exacerbate the situation where there’s too much oil.” US crude futures was down 0.7 per cent at $46.92 per barrel. The futures had surged 2.8 per cent on Thursday following a steep drop the previous day, during a week in which the hurricane roiled the oil market.
Brent crude shed 0.25 per cent to $52.72 a barrel.
Gold was near a 9-1/2 month high, supported as the dollar came off its recent highs and by lingering concerns over tensions in the Korean Peninsula.
Spot gold was slightly lower at $1,319.19 an ounce after rallying 1 per cent overnight. The precious metal was on track to gain 2.4 per cent this week, during which it touched $1,325.93 an ounce on Tuesday, its highest since early November. Other precious metals also enjoyed a strong week. Platinum hit its highest since March at $1,006.30 an ounce on Tuesday and last traded at $991.75. Silver hovered just below a 2-1/2 month high of $17.67 set on Tuesday.
— Reuters