Trading in equities, currencies to hinge on U.S. nonfarm payrolls for August
By V. Phani Kumar, Shri Navaratnam and Philip Vahn
HONG KONG (MarketWatch) -- Most Asian stock markets advanced Friday as an unexpected increase in U.S. pending-home sales helped ease economic worries and sent Japanese shares higher for a third straight session on the back of exporters such as Toyota Motor Corp.
Volumes were muted in many equity markets, however, and stocks and currencies were confined to narrow ranges as cautious investors awaited the U.S. nonfarm-payrolls report for August.
"U.S. economic data have been surprising, more than less, on the upside this week," said Philip Wee at DBS Group Research in Singapore. That could be because of "U.S. double-dip worries injecting more-than-usual bearishness into the consensus forecasts."
Japan's Nikkei Stock Average rose 0.6%, while Australia's S&P/ASX 200 and South Korea's Kospi both advanced 0.2%, and India's Sensex gained 0.1%.
Hong Kong's Hang Seng Index ended up 0.5%, as Taiwanese shares climbed 1.4% and China's Shanghai Composite ended flat.
Technology shares outperformed after the Nasdaq Composite (COMP 2,200, +23.17, +1.06%) rose 1.1% in Thursday's trading on Wall Street.
Elpida Memory (JP:6665 949.00, +31.00, +3.38%) (ELPDF 0.00, 0.00, 0.00%) rose 3.4% and Sony Corp. (SNE 29.06, +0.14, +0.48%) (JP:6758 2,485, +58.00, +2.39%) added 2.4% in Tokyo, while Seoul Semiconductor soared 6.5% and Hynix Semiconductor gained 3.3% in Seoul.
Doing better still in Taipei, shares of Chimei Innolux Corp. (CMLXY 0.00, 0.00, 0.00%) gained 6.9% and MediaTek soared 6.7%, while Nanya Technology surged by the day's 7% limit.
In Tokyo, Toyota (TM 68.22, -0.61, -0.89%) (JP:7203 2,909, +59.00, +2.07%) jumped 2.1% to end a four-session losing streak as Mazda Motor (MZDAY 21.85, -0.99, -4.33%) (JP:7261 187.00, +4.00, +2.19%) gained 2.2%, with the Japanese yen taking a breather after strong gains recently.
"We'd like to see how the dollar moves against the yen after U.S. jobs data," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.
In foreign-exchange markets, the U.S. dollar traded in tight ranges against the euro and the yen as traders waited for the potentially pivotal payrolls report.
Economists polled by MarketWatch are expecting a decline 105,000 in headline payrolls, although the U.S. private sector is expected to have added 30,000 jobs. Read preview of August jobs report.
"A very weak reading [in the jobs data] would feed speculation of imminent quantitative easing and could swamp any U.S. dollar positive safe-haven flow, thus creating terribly choppy forex markets, to say nothing about the reaction in equities," wrote Sue Trinh, senior currency strategist at Royal Bank of Canada, in emailed comments.
Dow Jones Industrial Average (DJIA 10,320, +50.63, +0.49%) futures were one point lower in screen trade, also moving in a narrow band.
Weak financials
On the downside in Seoul, shares of Shinhan Financial Group (SHG 75.52, -3.88, -4.89%) dropped 1.9%.
