MSCI’s broadest index tracking Asia-Pacific shares outside Japan saw fluctuations between gains and losses, rising 0.1% after two days of declines.
South Korea’s Kospi negatively impacted the regional benchmark in response to sharp declines in US chipmakers. Both S&P 500 e-mini futures and Nasdaq e-mini futures increased by 0.1%, while Japan’s Nikkei 225 fell by 1%.
US job growth hit a significant slowdown in June, with payroll increases for the previous two months being revised downward, as reported on Thursday, indicating a cooling labor market. The unemployment rate dropped to 4.2% from 4.3% in May, as workers exited the labor force, leading to the participation rate hitting its lowest point in over five years.
“These figures challenged the narrative that the Fed is on course to implement a hike in the latter half of this year,” noted Westpac analysts in their research report.
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The weak jobs data diminished traders’ hopes for a quick rate hike and increased the chances that the Fed would maintain current rates until October.
Fed funds futures are now indicating a 46.8% likelihood that the US central bank will hold rates steady at its meeting on September 15 to 16, up from a 35.8% chance the previous day, according to the CME Group’s FedWatch tool.
Overnight, Wall Street stocks showed mixed results, with the S&P 500 remaining flat, the Nasdaq Composite declining by 0.8%, and the Dow Jones Industrial Average reaching a record close.
The US market will be closed on Friday in honor of the Independence Day holiday.
Against the yen, the US dollar gained 0.2% to reach 161.435 yen at the start of Asian trading, with market liquidity reduced due to the holiday.
The dollar regained some strength after a jittery session on Thursday, spurred by a sudden increase in the Japanese currency following Reuters’ report that authorities have adopted a novel approach to their market interventions. The cause of the rally was not immediately clear.
The US dollar index, which gauges the dollar’s strength against a six-currency basket, remained steady at 100.98, after a 0.5% decline on Thursday.
In commodities, Brent crude futures slipped 0.4% to $71.49 as trading resumed in Asia, while gold increased by 0.1% to $4,125.49.
In cryptocurrencies, bitcoin was down 0.4% at $61,306.45, and ether fell 0.7% to $1,692.16.
