(Bloomberg) — Asian equities advanced Thursday after stocks and bonds rose on Wall Street in a week marred by tariffs, lackluster tech earnings and uneven US economic data.
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Shares in Australia, Japan and South Korea rose, while equity futures for Hong Kong also advanced. The S&P 500 and Nasdaq 100 both notched a second day of gains on Wednesday, extending a rebound from Monday’s decline.
Treasuries were stable in early Asian trading after rallying across the curve Wednesday. The US 10-year yield dropped nine basis points to 4.42% during the session while the policy-sensitive two-year yield declined three basis points to 4.18% — both the lowest since the middle of December. Australian yields fell early Thursday.
Lower yields weighed on the dollar. An index of greenback strength fell 0.2% to the lowest level in a week, undoing the gains spurred on by news of Donald Trump’s tariffs on Mexico, Canada and China over the past week that initially boosted demand for defensive assets.
The yen was steady after strengthening against the dollar in the prior session amid signs the Japanese currency faces fresh demand from hedge funds amid volatile trading in currency markets.
“Volatility has been the story this week, with the stock market trying to find its footing as it navigates a shifting tariff landscape and mixed earnings,” said Daniel Skelly, head of Morgan Stanley’s Wealth Management Market Research & Strategy Team.
The moves were partly the result of data that showed weaker-than-expected demand for services. The slowdown suggests activity may moderate in coming months as some Americans tighten their belts against a backdrop of the high cost of living.
Separate data showed employment at US companies picked up in January by more than forecast and comes ahead of Friday’s closely-watched jobs report.
Federal Reserve officials are closely tracking developments in the jobs market as they assess how much to lower interest rates this year. A rapid pickup in the unemployment rate last summer was a key driver behind policymakers’ decision to lower rates by a full percentage point in 2024. That said, the job market has showed renewed strength since then, with Fed Chair Jerome Powell describing it last week as “pretty stable.”
