TOKYO – Asian stock markets followed Wall Street higher on Friday ahead of a U.S. job market update that traders hope might encourage the Federal Reserve to ease off plans for more interest rate hikes.
Shanghai, Tokyo and Seoul gained. Hong Kong and Australian markets were closed for a holiday.
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Traders who worry higher interest rates might tip the global economy into recession looked ahead to U.S. government data that are expected to show the job market is cooling. They hope that might prompt the Fed to decide aggressive rate hikes are no longer needed to extinguish inflation.
Other data have “confirmed a clear trend that a labor market slowdown has begun,” said Edward Moya of Oanda in a report.
The Shanghai Composite Index gained 0.4% to 3,325.92 and the Nikkei 225 in Tokyo advanced 0.2% to 27,512.81. The Kospi in Seoul rose 1.2% to 2,488.24.
On Wall Street, the benchmark S&P 500 rose 0.4% on Thursday to 4,105.02 after a U.S. government report showed fewer workers filed for unemployment benefits last week.
Economists expect Friday's comprehensive non-farm payrolls report to show the number of jobs added by U.S. employers fell to 240,000 last month from February's 311,000.
The Dow Jones Industrial Average edged up less than 0.1% to 33,485.29. The Nasdaq composite gained 0.8% to 12,087.96.
The U.S. economy has been slowing under the weight of higher interest rates but inflation still is higher than the Fed's 2% target. That has fed expectations of at least a brief recession this year.
Fed officials say they plan at least one more increase and then will keep rates elevated through at least the start of 2024. However, some traders expect the U.S. central bank to start cutting rates as early as mid-year to shore up economic growth.
Markets were rattled by last month's high-profile failures of two U.S. banks and one in Switzerland, but regulators appear to have calmed fears by promising more lending to institutions if necessary and other measures to stabilize the global financial system.
There has been more fear in the bond market, where Treasury yields have sunk on worries about a weaker economy and the banking system’s struggles.
The 10-year Treasury yield, or the difference between the market price and the payout at maturity, slipped to 3.29% from 3.31% late Wednesday and from more than 4% last month. The two-year yield is down to 3.82% from more than 5% last month.
On Wall Street, Costco fell 2.2% after the warehouse membership retailer said an important measure of its sales fell in March as consumers pulled back spending on big-ticket items.
Levi Strauss fell 16% despite reporting stronger profit and revenue for the latest quarter than expected. Analysts said some of the sales may have been the result of discounting, pointing to squeezed profit margins.
Benchmark U.S. crude oil for May delivery rose 9 cents to $80.70 a barrel Thursday. Brent crude for June delivery rose 13 cents to $85.12 a barrel.
The dollar edged down to 131.72 yen from Thursday's 131.77 yen. The euro declined to $1.0919 from $1.0930.