Asian stock markets moved higher on Friday, led by strong gains in technology shares.
Investor sentiment improved after Wall Street rallied overnight following comments from Federal Reserve Governor Christopher Waller, which reduced fears of an immediate US interest rate hike.
Markets are now focused on the latest US employment data for fresh clues on the Federal Reserve’s next policy move.
Asian Tech Stocks Lead the Rally
All three major Wall Street indexes gained more than 1% overnight.
US stock index futures were little changed during Asian trading on Friday.
In Japan, the Nikkei rose more than 1%, while SoftBank Group surged over 10%.
However, gains in Japanese stocks were partly limited by a stronger yen.
The Japanese currency has gained around 2.6% this week as traders increase bets that the Bank of Japan could raise interest rates at its September meeting.
South Korean and Hong Kong Stocks Climb
South Korea’s KOSPI advanced around 1.4%.
Samsung Electronics rose 1.6%, while SK Hynix gained approximately 2.4%.
Hong Kong stocks also posted strong gains.
The Hang Seng Index jumped around 2.2%, with Alibaba and Baidu both gaining more than 4%.
Technology shares across the region benefited from lower expectations for near-term US interest rate increases.
Fed Rate Hike Bets Fall After Waller Comments
On Wall Street, the technology-heavy Nasdaq Composite closed around 1.4% higher as large AI-related stocks gained.
The rally followed comments from Waller suggesting that the Federal Reserve could keep interest rates unchanged this month.
According to CME FedWatch, the probability of a September rate hike fell to around 50%.
That was down from approximately 63% earlier.
Waller said recent economic data showed signs of disinflation.
He added that he would support keeping rates steady if upcoming reports confirmed that price pressures were continuing to ease.
Treasury Yields Ease
The change in Federal Reserve expectations also reduced pressure on bond markets.
The benchmark 10-year US Treasury yield fell overnight and later stood near 4.768%.
Lower bond yields can support technology stocks because they reduce the discount applied to future earnings.
This can make growth-oriented companies more attractive to investors.
China and Singapore Stocks Gain
Chinese markets also moved higher.
The Shanghai Composite and the CSI 300 each gained around 0.5%.
Singapore’s Straits Times Index climbed approximately 1.1%.
Australia moved against the broader regional trend, with the S&P/ASX 200 slipping around 0.1%.
Meanwhile, futures linked to India’s Nifty 50 fell approximately 0.2%.
US Jobs Report Takes Center Stage
Investors are now waiting for Friday’s US nonfarm payrolls report.
The unemployment rate is expected to remain unchanged at 4.1%.
A weaker-than-expected employment report could strengthen expectations that the Federal Reserve will keep interest rates unchanged.
However, stronger jobs data could revive speculation about another rate increase.
The report is therefore likely to be an important driver for global stocks, bonds and currencies.
Oil Prices Keep Inflation Risks in Focus
Geopolitical tensions remain another important factor for financial markets.
Brent crude traded near $96 per barrel and was on track for a weekly gain of around 7%.
Concerns over energy flows through the Strait of Hormuz have kept oil prices elevated.
Higher energy costs could also add to inflation pressures, potentially complicating the Federal Reserve’s interest rate outlook.
For now, Asian markets remain supported by easing Fed rate hike expectations, strong technology shares and improved global risk sentiment.
