Coin Press - Asia tracks Wall St. rally after US jobs data, Fed minutes

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Asia tracks Wall St. rally after US jobs data, Fed minutes
Asia tracks Wall St. rally after US jobs data, Fed minutes / Photo: Frederic J. BROWN - AFP

Asia tracks Wall St. rally after US jobs data, Fed minutes

Stocks edged up in Asia on Thursday after Wall Street returned to winning ways on the back of softer-than-expected jobs data and minutes showing some Federal Reserve officials were open to an interest rate cut at their meeting last month.

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The readings reinforced optimism that the central bank will begin unwinding its long-running monetary tightening campaign, with analysts saying the main debate is over how big the move will be and how many more will follow.

The minutes also came just days before Fed chief Jerome Powell was due to make a much-anticipated speech at the annual central bankers symposium in Jackson Hole, Wyoming, where it is hoped he will flag a cut.

The latest round of buying came after Labor Department figures revealed US employers added around 68,000 fewer jobs monthly in the year to March than initially estimated.

The reading rammed home the fact that the labour market had softened -- at the same time inflation was coming down -- enough for decision-makers to begin lowering borrowing costs.

The minutes from the Fed's July policy meeting, meanwhile, showed most members thought it "appropriate" to cut rates in September, while some saw "a plausible case for reducing the target range 25 basis points at this meeting or that they could have supported such a decision".

Observers said the minutes made a cut all but certain, with discussions now on whether it goes for 25 or 50 basis points.

Investors are pricing more than one percentage point of cuts by the end of the year, according to Bloomberg News.

But the Fed meeting was before a jobs report that came in so far below expectations it helped spark a sell-off across markets and fuelled fears of a recession, Ray Attrill at National Australia Bank pointed out.

That, he said, would certainly "have reinforced these sentiments" about cutting.

"Whether it means the... (September) meeting could yet produce a 50 rather than 25 basis point cut doubtless rests both with the August non-farm payrolls report due on September 5 and the incoming inflation data between now and the meeting," he added.

"The former will at a minimum need to mimic (or exceed) the July softness and the latter prove very comforting to lead the Fed to cut by 50 basis points."

Independent analyst Stephen Innes warned the jobs revision was close to "the worst case scenario" and a "wake-up call".

"The economy's resilience is still key -- if it holds steady, the stock market might continue its climb," he said.

"But here's the kicker: everything from the scale of Fed cuts to the true strength of the US economy could come crashing together in a classic 'be careful what you wish for' scenario when the next (jobs) report drops."

While all three main indexes on Wall Street rose -- with the S&P 500 within a whisker of a record -- Asian markets swung in and out of positive territory.

Tokyo, Hong Kong, Sydney, Singapore, Seoul, Mumbai, Bangkok and Manila rose Thursday, though Shanghai, Wellington, Jakarta and Taipei slipped.

London, Paris and Frankfurt were all up at the open.

On currency markets, the dollar remained under pressure from the expected rate cuts, while investors were also looking ahead to Bank of Japan boss Kazuo Ueda's questioning from lawmakers after this month's rate hike and hawkish comments caused panic across markets.

- Key figures around 0710 GMT -

Tokyo - Nikkei 225: UP 0.7 percent at 38,211.01 (close)

Hong Kong - Hang Seng Index: UP 1.1 percent at 17,576.10

Shanghai - Composite: DOWN 0.3 percent at 2,848.77 (close)

London - FTSE 100: UP 0.2 percent at 8,300.46

Dollar/yen: UP at 145.42 yen from 145.22 yen on Wednesday

Euro/dollar: DOWN at $1.1148 from $1.1151

Pound/dollar: UP at $1.3091 from $1.3087

Euro/pound: DOWN at 85.16 pence from 85.18 pence

West Texas Intermediate: DOWN 0.3 percent at $71.72 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $75.96 per barrel

New York - Dow: UP 0.1 percent at 40,890.49 (close)

X.Cheung--CPN