Asian shares edged higher in early trade on Friday and oil prices continued to rebound, even as investors remained wary ahead of the key US non-farm payrolls report for January later in the session.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up about 0.1 per cent. Japan’s Nikkei stock average percent rose 1 per cent in early trade.
On Wall Street on Thursday, major indexes all ended with gains of 1 per cent or more, and a corresponding rise in US Treasury yields underpinned the US dollar’s lift against rivals.
Economists polled by Reuters expected US employers to add 234,000 workers in January, below December’s increase of 252,000. The jobless rate was expected to remain at a 6-1/2 year low of 5.6 per cent, while average hourly earnings was estimated to show a rise of 0.3 per cent following the previous month’s surprise 0.2 per cent drop.
A spate of mixed US data on Thursday on jobless claims, productivity and the trade balance gave investors few clues on the overall growth outlook, and the timing of the US Federal Reserve’s move to raise interest rates which some believe could be as early as this summer.
“If payrolls rise less than 200k, we could see a stronger rally in EUR/USD and a steeper decline in USD/JPY because a weak report would lead investors to think that the Federal Reserve will be more patient with raising interest rates,’’ said Kathy Lien, managing director at BK Asset Management in New York.
“A stronger report however would be extremely positive for the greenback by hardening expectations for a 2015 rate increase,’’ she added.
The dollar was steady on the day against the yen at 117.48 JPY=EBS, while the euro inched down 0.1 per cent against the dollar on the day to to $1.1466, after marking sharp rises overnight on speculation the Swiss central bank was buying euros to weaken the franc.
The Swiss government had warned on Thursday that a soaring franc meant economic growth would be weaker than previously expected.
Currency investors warily watched developments in Greece, where Prime Minister Alexis Tsipras had pledged on Thursday to “put an end once and for all’’ to the European Union’s austerity policies and to bargain hard for a new deal for Greece, after the European Central Bank decided to stop accepting Greek bonds as collateral to raise cash.
The ECB’s decision heightened fears about the fallout on Greece’s financial system as well as the possibility that the country might leave the euro zone.
Rising Treasury yields helped support appeal for the greenback, with the benchmark 10-year yield rising to 1.8204 per cent in Asia from its US close of 1.815 per cent on Thursday.
US crude added about 0.7 per cent to $50.83 a barrel, after surging more than 4 per cent in the previous session as escalating conflict in producer Libya and an expected boost in oil demand following China's central bank easing helped the market rebound from a sharp rout.