Asian Stocks Fall Before U.S. Payrolls Data as Rate Bets Climb

  • American jobless claims fell to second-lowest level since 1973
  • Japan’s Topix index halts four-day rally as yen rebounds

Asian stocks fell ahead of a closely watched U.S. payrolls report as stronger economic data fueled bets the Federal Reserve will raise interest rates this year.

The MSCI Asia Pacific Index lost 0.3 percent to 140.20 as of 4:11 p.m. in Hong Kong, paring its weekly gain. U.S. jobless claims fell to the second-lowest level since 1973, strengthening the case for the Fed to raise interest rates. Odds that it will do so by December climbed to 64 percent on Thursday from 53 percent a week earlier, ahead of the official labor report Friday. Japanese shares retreated as the yen rebounded after a sudden plummet in the British pound rattled investors. Equity gauges from Hong Kong to Thailand, Indonesia and New Zealand declined.

The main Asian stock gauge has nudged slightly higher this week, heading for a 0.3 percent advance, as investors await U.S. economic reports and watch for comments by Fed officials to assess the path of interest rates. The measure posted its best quarter since 2012 in the three months ended September.

“Markets are likely to remain relatively cautious” before U.S. payrolls data,
said Ric Spooner, Sydney-based chief market analyst at CMC Markets. “A moderate miss to the downside in the U.S. jobs data will probably do little to change the outlook for a Fed rate hike this year. However, a good read could put the issue largely beyond doubt.”

Jobs Report

The September jobs report is in focus as recent data have exceeded forecasts, with a Bloomberg index tracking economic surprises turning positive on Thursday for the first time since August. Economists surveyed by Bloomberg predict the economy will have added 172,000 jobs in September, up from 151,000 a month earlier.

Japan’s Topix index closed 0.3 percent lower after rising 2.4 percent over the previous four days before a holiday on Monday. Seven & i Holdings Co. fell the most in three months after it unveiled a restructuring plan to divest struggling department stores and set up a real estate division. The yen rebounded from its longest losing streak against the dollar since July 2014. The pound plunged as much as 6.1 percent, before recovering most of the loss, with traders saying the slump was exacerbated by computer-initiated sell orders.

South Korea’s Kospi index slid 0.6 percent, Australia’s S&P/ASX 200 Index fell 0.3 percent and New Zealand’s S&P/NZX 50 Index dropped to a two-month low. Singapore’s Straits Times Index declined 0.5 percent, while equity gauges in Thailand, Indonesia and South Korea fell at least 0.6 percent.

Hong Kong’s Hang Seng Index dropped 0.4 percent before a holiday Monday, paring its weekly advance to 2.4 percent as energy companies outperformed the rest this week after oil rallied on hopes that a global glut would subside amid planned output cuts by OPEC. China’s markets will resume trading Monday after a week-long break.

Asia Gauge

The MSCI Asia Pacific Index rose 8.4 percent last quarter, its largest such advance since early 2012. It’s up 6.2 percent in 2016, helped by the recovery in oil after a turbulent start to the year.

Futures on the S&P 500 Index slipped 0.2 percent. The underlying U.S. equity benchmark index was little changed Thursday as lackluster corporate results damped sentiment before the government’s jobs report and the start of earnings season next week.

West Texas Intermediate crude futures was little changed after climbing 1.2 percent to breach $50 a barrel in New York on Thursday.

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