Asian stocks edge up on Wall Street gains, dollar falls again before US jobs data

Pedestrians walking past a stock prices board in Tokyo on Feb 3.
Pedestrians walking past a stock prices board in Tokyo on Feb 3. PHOTO: AFP

TOKYO (REUTERS) - Asian equities edged up on Friday (Feb 5), taking early inspiration from an overnight rise on Wall Street, while the US dollar wobbled ahead of the closely watched US jobs report.

MSCI's broadest index of Asia-Pacific shares outside Japan crept up 0.1 per cent. The index was on track to end the week 0.3 per cent lower.

US stocks eked out a second straight day of gains on Thursday as a weaker dollar helped materials shares by lifting commodity prices, though disappointing forecasts from retailers and anxiety ahead of Friday's non-farm jobs report limited the advance. The Dow rose 0.5 per cent and the S&P 500 gained 0.2 per cent.

The dollar remained firmly on the back foot after being hit this week by lacklustre economic data and dovish comments from some Fed officials that curtailed expectations of a near-term US interest rate hike.

The dollar stood little changed at 116.84 yen after sinking 1 per cent overnight. The greenback, which soared to close to 122 yen recently, was heading for a 3.5 per cent loss on the week. It was poised to hand back all the gains made on the Bank of Japan's surprise decision last Friday to adopt negative interest rates.

The euro was steady at US$1.1200 and headed for a 3.4 per cent gain on the week, its biggest in more than four years.

The markets will look to the US jobs data to set direction, with the employment report expected to show employers adding 190,000 jobs in January, the median estimate of 108 economists polled by Reuters.

"Markets seem so determined to price out the risk of a Fed rate hike any time soon that it is hard to imagine a January US employment outcome strong enough to reignite pricing for March or June. Even after the US dollar's sharp fall in recent days, there still seems to be greater scope for a USD fall on a weak reading than for a rally on a strong outcome," wrote Sean Callow, a senior strategist at Westpac.

The dollar index stood at 96.568 after stooping to 96.259 overnight, its lowest since late October.

Crude oil prices dipped, trimming some of the gains made earlier in the week that had brought some relief to risk asset markets.

US crude extended overnight losses and was last down 0.6 per cent at US$31.53 a barrel as doubts over major oil producers agreeing to joint output cut overshadowed the positive effects of a weaker dollar.

Spot gold hovered near a 3-month high of US$1,157.20 an ounce, having soared this week on diminished prospects of the Fed raising rates soon. Higher interest rates would in theory reduce the appeal of non-yielding gold.