Asian shares rally as traders raise Fed rate-hike bets ahead of payrolls

  • Asian shares and bonds advanced as investors awaited U.S. payrolls data and Federal Reserve guidance.
  • Fed rate-hike odds reached roughly two-thirds, up from 37% a week earlier, CME Group data showed.
  • Japan’s 30-year bond yield fell 10 basis points before the Ministry of Finance auction.

Asian shares and bonds rallied on Thursday, while the yen held its gains as investors awaited Friday’s U.S. nonfarm payrolls report and comments from Federal Reserve officials for clues on whether the central bank will raise interest rates this month. Traders now see roughly a two-in-three chance of a 25-basis-point increase, up from 37% a week earlier, according to CME Group’s FedWatch tool. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%, while the dollar index slipped 0.05% to 99.54. The yen strengthened 0.07% to 158.59 per dollar after surging 0.9% in the previous session. Bond yields eased from recent highs, with the U.S. 10-year yield down 0.99 basis point to 4.784% and Japan’s 30-year government bond yield falling 10 basis points to 4.065% ahead of an auction of super-long debt. Oil prices edged lower amid uncertainty over renewed U.S.-Iran military strikes, while gold and silver gained. Markets also monitored policy signals from the Federal Reserve, European Central Bank and Bank of Japan, with Japanese services growth reaching a five-month high in August.

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