Chinese technology stocks offered ballast to an otherwise downcast day for Asian equities as traders await US jobs data that will help illuminate the path ahead for interest rates.
Hong Kong’s Hang Seng Index touched the highest level since November in Friday trading as a gauge of Chinese technology stocks trading in the city was poised to enter a technical bull market. Shares in mainland China and Taiwan also advanced, running against the grain of declines in Japan and South Korea.
The decline in Tokyo partly reflected a stronger yen overnight that began to abate in Friday trading. The currency edged lower against the greenback, ending a four-day run of strengthening.
The mixed moves underscored a lack of direction ahead of US nonfarm payroll figures due later Friday, which will refocus traders away from the drama over tariffs that rattled financial markets earlier in the week. A weak print could boost expectations for further Federal Reserve cuts, while a stronger-than-expected number may have the opposite effect.
“The market is going to continue to be a bit direction less,” Amy Xie Patrick, head of income strategies for Pendal Group, said on Bloomberg Television. She is focused on holding quality assets “and looking for safer havens and the ability to move things around,” she said.
The Hang Seng Tech Index rose as much as 1.9%, taking its gains from a January low to around 20%. The index is poised to enter a bull market after a cheap artificial intelligence model from startup DeepSeek ignited interest in China’s internet firms.
“The Hang Seng and MSCI China have higher weightings of stocks that the market perceives to be beneficiaries of the newly popular DeepSeek theme,” said Chetan Seth, Asia Pacific equity strategist at Nomura Holdings Inc.
Friday’s jobs report is expected to show 175,000 new roles added to the US economy. Separate jobs data released Thursday showed initial jobless claims picked up while labor productivity remained robust. In addition to the employment print Friday, Wall Street will be closely watching a revision to job growth. Economists predict that will be substantial, but probably not as bad as initially estimated.
“As long as Friday’s jobs report shows that the economy added 170,000-200,000 jobs during the month, the market should largely absorb this number with little volatility,” said Gaurav Mallik at Pallas Capital Advisors. “If we see a number much stronger than this, it could remove the prospects of any rate cuts this year, and if it’s a number much lower, it could raise worries about a weakening labor market.”
Earlier gains for the yen follow comments from Bank of Japan board member Naoki Tamura, who underscored the case for higher interest rates. The country’s Prime Minister Shigeru Ishiba prepares to meet with US President Donald Trump on Friday.
“Hawkish headlines from Japanese officials on domestic policy rates have created some enthusiasm,” for the yen, while “the dollar has lost its tailwind for now,” said Jerry Minier, co-head of G10 FX trading for Barclays.
Elsewhere, Treasury Secretary Scott Bessent said that his department is conducting outreach to major holders of government securities to get a better picture on their thoughts on the federal debt limit. Bessent also said he favors a strong dollar and has no plans to alter the government’s debt-issuance plans.
Shares in Amazon.com Inc. fell in after-hours trading following earnings results that showed projected profits for the current quarter below analysts’ estimates. The shortfall indicates the company continues to ramp up spending to support artificial intelligence services.
In Asia, data set for release includes outright bond purchases for the Bank of Japan, inflation for Taiwan and a rate decision in India. Consensus forecasts indicate the Reserve Bank of India will cut its benchmark repurchase rate 25 basis points to 6.25%, but some analysts say there is a chance the RBI could cut by twice that amount.
Revision Risk
Every year, the January employment report from the Bureau of Labor Statistics comes with revisions for the 12 months through the previous March. Those adjustments traditionally don’t get much attention. But this week they will, because the agency’s preliminary estimate in August suggested the downward revision would be 818,000 — the largest since 2009.
Fed Chair Jerome Powell said last week officials want to see more progress on inflation and would be looking for “serial readings” showing price pressures moving in the right direction. For now, traders still see the Fed’s next move as a cut — although likely not until mid-year. Treasury yields hit 2025 lows this week.
Treasuries were steady after small declines across the curve Thursday. An index of the dollar was little changed.
In commodities, gold was steady after retreating from a record high Thursday, its first decline in six sessions. Oil was little changed after falling Thursday as Trump’s renewed pledge to drive down the price of crude overshadowed his push for tighter Iranian sanctions.
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