Technology-led gains lifted equity markets across Asia on Friday, after remarks by Federal Reserve Governor Christopher Waller eased concerns about a near-term rise in borrowing costs, building on positive momentum from the previous session on Wall Street.
Markets trained their focus on forthcoming U.S. jobs figures, which were expected to offer guidance on the Federal Reserve's next monetary policy moves. The three principal equity indices on Wall Street each posted gains exceeding 1% in overnight trading. Equity index futures on Wall Street held steady during Asian hours on Friday.
The Nikkei index in Tokyo advanced over 1%, while technology-focused investment firm SoftBank Group posted gains exceeding 10%. Advances in Tokyo equity markets were constrained by a pronounced rally in the yen. The yen has appreciated roughly 2.6% over the course of the week, reflecting trader expectations that the Bank of Japan will lift interest rates at its upcoming September meeting.
The KOSPI index in South Korea advanced 1.4%, with shares of Samsung Electronics and SK Hynix posting gains of 1.6% and 2.4%, respectively. Hong Kong's Hang Seng index advanced 2.2%, while Alibaba and Baidu each posted gains exceeding 4%.
Shares in the technology sector advanced on the back of a more accommodating interest-rate environment. The technology-focused NASDAQ Composite index ended the trading session up 1.4%, lifted by advances in artificial intelligence megacap shares. Those advances followed a reassessment of Fed rate-hike expectations for the month, with CME FedWatch data showing the probability of an increase dropping to around 50% from roughly 63% prior to Waller's remarks.
Waller noted that the latest figures pointed to a moderation in inflation, adding that he would back holding interest rates steady at the upcoming policy meeting provided that forthcoming economic data continued to reflect a decline in price pressures. Revised expectations among investors helped relieve strain on government debt markets. The 10-year Treasury note's yield held around 4.768%, having pulled back during the previous session.
Both the Shanghai Composite and the CSI 300 indices posted a 0.5% advance. The Straits Times Index in Singapore advanced by 1.1%. The S&P/ASX 200 in Australia slipped 0.1%, moving against the broader regional direction. Nifty 50 futures edged lower by 0.2%.
Market participants are watching for the release of U.S. employment data, with the nonfarm payrolls figures expected later on Friday. Joblessness is forecast to hold steady at 4.1%. A below-forecast reading would reinforce expectations that the Fed holds rates steady this month, whereas data exceeding projections could renew pressure for a rate increase.
Brent crude held near $96 per barrel, posting a roughly 7% weekly gain, as regional tensions and uncertainty surrounding energy transit through the Strait of Hormuz kept upward pressure on inflation expectations.
