MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.8%, more than reversing the decline from Thursday
Asian shares were trying to end a volatile week on a bright note after Wall Street gained and data showed China taking a step away from deflation, while Japanese stocks struggled to sustain an early rally.
The Nikkei added as much as 2.4% early in the session before dropping into the red and then edging up 0.6%. It has erased most of the losses from a 13% slump on Monday and closed the week 3% lower.
The yen also swung from negative to positive through the session, last up 0.3% at 146.90 per dollar.
Wall Street futures also turned lower, with Nasdaq futures last down 0.1%. Europe is still set for a higher open, with both EUROSTOXX 50 futures and FTSE futures gaining 0.2%.
MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 1.8%, more than reversing the decline from Thursday. For the week, it has reversed earlier losses to be largely flat.
Overnight, data showed U.S. jobless claims dropped more than expected last week, suggesting fears the labour market is unravelling were overblown. That led markets to pare back the chance of an outsized half-point rate cut from the Fed in September to 54% from 69% a day earlier.
Stocks had sold off sharply after last week’s U.S. jobs report triggered fears of a potential U.S. recession, but investors have bought into the recent dip, with the Nasdaq 3% higher overnight and S&P 500 up 2.3%.
Also helping sentiment is Chinese data showing that consumer inflation stayed at 0.5% in July, above forecasts of a gain of 0.3%, indicating there is less risk of the economy slipping into outright deflation.
Chinese blue chip stocks gained 0.1%, and Hong Kong’s Hang Seng index climbed 1.5%.
