Asian shares rose on Friday, while the dollar pulled back from a one-month peak as investors took stock of the slew of U.S. economic data that showed a resilient labour market ahead of a crucial non-farm payrolls report due later in the day.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.46% higher after dropping 2.3% on Thursday. Japan's Nikkei was choppy and last up 0.1%.
"Asian equities face challenging trading conditions on Friday," said market analyst Anderson Alves at ActivTrades, pointing to a risk-off environment after Fitch downgraded its rating of U.S. government by one notch earlier in the week.
"This change has added extra turbulence for Asian risk assets," Alves said.
Chinese blue-chips opened up 0.7%, while the Shanghai Composite Index was up 0.5%. The Hong Kong benchmark Hang Seng surged 1.3% at open.
China's central bank governor pledged on Thursday to guide more financial resources toward the private economy, indicating refreshed urgency from authorities to bolster business sentiment as economic momentum weakens.
Overnight, U.S. stocks closed little changed after a choppy trading session, as investors weighed rising Treasury yields with the latest batch of economic data and earnings. [.N]
Data showed the number of Americans filing new claims for unemployment benefit rose slightly last week, while layoffs dropped to an 11-month low in July as labour market conditions remain tight.
"U.S. stock markets may be entering a correction phase after a multi-month rally," said markets analyst Tina Teng at CMC Markets. Teng said the upcoming non-farm payroll data will likely provide clues to the Federal Reserve's policy path and can be another price mover.
A mixed set of earnings from technology bellwethers are likely to dominate U.S. markets with Amazon.com reporting sales growth and profit that beat analyst estimates, whereas Apple forecast a sales slump to continue into the current quarter. E-mini futures for the S&P 500 was up 0.29%.
U.S. Treasury yields have been elevated partly due to a rise in supply, with the Treasury Department announcing a $103 billion offering on Wednesday. [US/]
The yield on 10-year Treasury notes was at 4.187% in Asian hours, just shy of the nine-month peak of 4.198% touched on Thursday. The yield on the 30-year bond was at 4.302%, close to the nine-month high of 4.326%.
In currencies, the dollar index, which measures U.S. currency against six peers, fell 0.039% to 102.41, easing away from the near one-month peak of 102.84 reached on Thursday.
The euro was up 0.08% to $1.0953, while the yen weakened 0.04% to 142.63 per dollar, after gaining 0.5% on Thursday as investors sought safer assets.
Sterling last fetched $1.2725, up 0.09%, after a choppy session overnight as a 25 basis point interest rate hike from the Bank of England provided little comfort for the pound.
In commodities, U.S. crude rose 0.55% to $82.00 per barrel and Brent was at $85.56, up 0.49% on the day. [O/R]
Spot gold added 0.1% to $1,936.09 an ounce. U.S. gold futures gained 0.10% to $1,933.90 an ounce.
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