Asian markets rose to record highs on Thursday, supported by strong gains in technology stocks, while the U.S. dollar strengthened after upbeat U.S. jobs data reduced expectations of an early Federal Reserve rate cut.
Japan’s Nikkei and TOPIX, along with South Korea’s KOSPI, touched all-time peaks, pushing MSCI’s broad Asia-Pacific index up 0.7% to a fresh record. The regional index has gained about 13% so far this year. Japanese equities extended their rally following Prime Minister Sanae Takaichi’s decisive election victory, which boosted expectations of economic stimulus.
In the U.S., data showed job growth accelerated in January and unemployment eased, signalling labour market resilience. As a result, market expectations for a March rate cut dropped sharply, while Treasury yields climbed. The two-year yield rose to 3.505%, supporting the dollar.
The yen strengthened despite broader dollar gains, as investors reassessed Japan’s fiscal outlook after the election.
In commodities, oil prices edged higher amid U.S.-Iran tensions, while gold slipped 0.44% after the previous session’s rally.
Investors now await U.S. inflation data for further clues on the Fed’s policy path.
Frequently Asked Questions
Why did Asian stocks hit record highs?
Strong gains in technology stocks and positive investor sentiment pushed major indices in Japan and South Korea to all-time highs, lifting the broader Asia-Pacific market.
How did the U.S. jobs report impact markets?
The stronger-than-expected U.S. jobs data reduced expectations of an early Federal Reserve rate cut, leading to higher Treasury yields and a firmer dollar.
Why did expectations for a March Fed rate cut decline?
Robust job growth and stable unemployment signalled a resilient labour market, lowering the urgency for the Fed to ease policy in the near term.
Why did the yen strengthen despite dollar gains?
The yen firmed as investors reassessed Japan’s fiscal outlook following the recent election, prompting short-covering and renewed confidence in the currency.
What are markets watching next?
Investors are closely monitoring upcoming U.S. inflation data, which could further influence interest rate expectations and global market direction.
