Mumbai, 8 Mar (Commoditiescontrol): Stocks in Asia rose to a seven-month peak on Friday, tracking global peers as investors cheered the prospect of an imminent rate easing cycle led by major central banks, keeping the dollar and Treasury yields under pressure.
Japan remained an outlier as expectations mount that the Bank of Japan (BOJ) could finally exit negative interest rates this month. That lit a fire under the yen and sent domestic bond yields rising.
MSCI's broadest index of Asia-Pacific shares outside Japan peaked at 538.47 points in early Asia trade, its strongest level since August. It was last 1% higher, and was eyeing a weekly gain of nearly 2%.
Global stock indexes had in the previous session rallied to record highs after the European Central Bank (ECB) laid the ground for a potential rate cut in June, while Federal Reserve Chair Jerome Powell struck a similar tone on the path of U.S. rates.
The benchmark 10-year yield was last at 4.0923%. Focus now turns to the closely watched nonfarm payrolls report due later on Friday for further clues on the U.S. rate outlook, particularly after January's blowout jobs report which stunned markets.
Friday's labour market data comes ahead of a reading on U.S. inflation next week.
The single currency was last at $1.0948, after peaking at $1.0956 earlier in the session. Sterling similarly rose to an over two-month high of $1.2820.
The yen hit a one-month high against the greenback on Friday at 147.54 per dollar, helped by recent commentary from BOJ officials which fuelled speculation that the central bank could soon move away from its ultra-easy monetary policy stance. The Japanese currency was poised for its best week since December with a nearly 1.5% rise.
BOJ governor Kazuo Ueda and board member Junko Nakagawa said on Thursday the Japanese economy was moving towards the central bank's 2% inflation target, while the country's largest trade union group said the average wage hike demand hit 5.85% for this year, topping 5% for the first time in 30 years.
The BOJ has long set broad-based and sustained wage increases as a prerequisite for a stimulus exit.
Reflecting expectations of a near-term BOJ pivot, the two-year Japanese government bond (JGB) yield rose to its highest since April 2011 at 0.2%, while the 10-year JGB yield was up 1.5 basis points at 0.74%.
Elsewhere in Asia, Chinese stocks started the session on a strong footing, with blue chips rising 0.4% and the Shanghai Composite Index gaining 0.25%. Both indexes, however, were set to end the week little changed. Hong Kong's Hang Seng Index jumped more than 1%.
Data on Thursday showed China's export and import growth in the January-February period beat forecasts, though that did little to turn battered sentiment around, as investors were left underwhelmed by the lack of details for strong stimulus from Beijing to shore up the country's economic recovery at this week's annual parliament session.
In commodity markets, Brent rose 31 cents to $83.27 a barrel, while U.S. crude gained 40 cents to $79.33 per barrel.
Spot gold edged 0.1% lower to $2,157 an ounce after touching an all-time high of $2,164.09 in the previous session, as the prospect of an imminent Fed easing cycle boosted the appeal for the non-yielding yellow metal.
(By Commoditiescontrol Bureau: 09820130172)
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