HONG KONG (BLOOMBERG) - Stocks in Asia's largest equity markets climbed before a US jobs report Friday as Japanese shares advanced and a surprise gain in a Chinese manufacturing gauge drove a rally in Hong Kong equities. Developing-nation shares slumped.
The MSCI Asia Pacific Index was little changed at 138.05 at 5:30 p.m. in Tokyo (4.30 p.m Singapore time) after capping two months of gains. Japan's Topix index rose 0.6 per cent as the yen traded at 103.35 to the US dollar. The Hang Seng Index rallied to a one-year high after China's official factory gauge unexpectedly climbed in August to the highest level in almost two years.
Macau casino operators surged after gambling revenue in the city rebounded. Energy and materials stocks slid as Indonesia led emerging-market shares lower in Asia.
The Chinese data was "a nice surprise for everyone because most were noticing the deceleration of the PMI trend in the past few months," said Khiem Do, the head of multi-asset strategy at Baring Asset Management (Asia) Ltd. "What we need to watch out for right now is the possible Fed interest-rate hike in the next few weeks."
Singapore's Straits Times Index (STI) rebounded initially from three straight days of falls but was unable to sustain momentum, dropping 4.12 points to close at 2,816.47.
Gains of Asian equities last month were spurred by a rebound in Japanese stocks after growing expectations for a US rate rise boosted the US dollar at the expense of the yen, benefiting exporters. Investors are now shifting focus to the US employment data due on Friday, a key economic report that could sway the Federal Reserve to take action when it reviews monetary policy in three weeks.
Banks and automakers advanced in Japan, extending gains this week with the yen hovering close to a one-month low against the dollar. The Japanese currency has weakened this week with investors betting on a sooner-than-expected rate increase by the Fed following Chair Janet Yellen's hawkish remarks last Friday. Economists predict Friday's employment report will show jobs growth slowed to 180,000 last month from 255,000 in July.
The Hang Seng Index advanced 0.8 per cent to its highest level since Aug. 19, 2015, while a gauge of mainland Chinese shares in Hong Kong added 0.7 per cent. China's manufacturing purchasing managers index rose to 50.4 in August from July's 49.9.
The rebound in August is fueling optimism the nation's economy is stabilizing, giving policy makers more room for reforms of state-owned firms. The Shanghai Composite Index slid to the lowest in almost three weeks.
Australia's S&P/ASX 200 Index declined 0.3 per cent, while New Zealand's S&P/NZX 50 Index added 0.3 per cent.Indonesia's Jakarta Composite Index slid 1.2 per cent. The Philippine Stock Exchange Index fell to the lowest since July 8 as foreign fund managers pulled money out of the nation last week at the fastest pace in a year. Vietnam's VN Index dropped the most in a month.