Asia stocks advance, with Nikkei up 0.7% despite stronger yen

Asian markets advanced Friday as markets awaited key US jobs data, which will offer a key indicator of whether the Federal Reserve will pull the trigger in June. The Japanese yen will also be on investors’ radar after the dollar-yen fell below 109 levels Thursday. Despite the stronger yen, the Nikkei 225 was trading up 0.72 percent in early Asian trade, breaking its two-day losing streak. Down Under, the ASX 200 gained 0.7 percent, buoyed by its energy subindex, which was up 0.82 percent and its industrials subindex, which was 1.01 percent higher. In South Korea, the Kospi was mostly flat. Angus Nicholson, market analyst at IG, said in a morning note, “Asian markets look keen to follow US markets higher after a difficult session yesterday.” The dollar fell to its lowest level since May 16 against the safe-haven yen on Thursday in the US, touching 108.5. The pair was trading at 108.96 as of 8:35 a.m. HK/SIN. Nicholson said markets had hoped Japanese Prime Minister Shinzo Abe would announce a major fiscal spending package on Wednesday at the same time that he announced he would delay an increase on sales tax, which had been set for April 2017. “Expectations for further stimulus from the Bank of Japan at 16 June meeting are fairly low, so the market was really looking to the government to step up the fiscal easing to help weaken the Japanese yen,” he said. “The market was ultimately disappointed.” Oil prices shrugged off losses on OPEC’s decision not to set an output ceiling, getting a boost after EIA data showed a weekly fall in US crude stockpiles. US crude futures settled 16 cents or 0.3 percent higher at USD 49.17 a barrel, while Brent futures ended at USD 50.04, up 0.6 percent and the first settlement above USD 50 since November 3. On Friday, the Caixin China services PMI is due, followed by the closely-watched US nonfarm payrolls, factory orders, ISM services and trade. The consensus estimate is for US nonfarm payrolls to come in weaker than April figures at 164,000, with the unemployment rate at 4.9 percent, according to Reuters. The Nasdaq composite finished up 0.39 percent at 4,971.36 points. The Dow Jones industrial average finished down 0.27 percent at 17,838.56, while the S&P 500 ended at its highest since November 3, 2015, up 0.28 percent at 2,105.26.


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