Asian markets rise modestly ahead of U.S. jobs data

Investors were looking ahead to monthly U.S. employment numbers for signs of weakness that might prompt the Fed to decide it needs to ease off on aggressive rate hikes to cool inflation. Other data suggest the economy is slowing, which should reduce pressure for prices to rise.

“There is likely to be particular focus on the resilience of jobs growth” after an uptick in unemployment claims, said Anderson Alves of ActivTrades in a report.

The Nikkei 225
NIK,
+1.14%
in Tokyo gained 0.8% after June labor cash earnings rose 2.2% over a year ago, though forecasters warned that strength was unlikely to last. Workers get half-yearly bonuses in June.

The Shanghai Composite Index
SHCOMP,
-0.02%
advanced 0.3% while the Hang Seng
HSI,
-0.67%
in Hong Kong was about flat.

The Kospi
180721,
+0.16%
in Seoul added 0.9% and Sydney’s S&P/ASX 200
XJO,
+0.45%
advanced 0.4%. Stocks advanced in Singapore
STI,
-0.38%,
Taiwan
Y9999,
+0.84%
and Indonesia
JAKIDX,
-0.50%.

Investors worry rate hikes by the Fed and other central banks in Europe and Asia to tame inflation that is running at multi-decade highs might derail economic growth.

The Fed has raised its benchmark rate twice by 0.75 percentage points this year, three times its usual margin and the biggest hikes since the early 1990s.

Fed officials have tried to calm fears the United States might tip into a recession by pointing to a strong job market as evidence the economy can tolerate higher borrowing costs.

The number of Americans who applied for jobless benefits last week rose by a modest 6,000 from the previous week to 260,000, the Labor Department reported Thursday. First-time applications generally reflect layoffs, but forecasters still see the job market one of the strongest parts of the economy.

Data earlier this week indicated the number of new U.S. job openings being advertised slipped but was still near record highs.

On Wall Street, the benchmark S&P 500 index closed 0.1% lower on Thursday while investors digested corporate earnings reports and waited for the jobs data.

The S&P 500
SPX,
+1.73%
declined to 4,151.94 and the Dow Jones Industrial Average
DJIA,
+1.27%
fell 0.3% to 32,726.82. The Nasdaq composite
COMP,
+2.09%
rose 0.4% to 12,720.58.

In energy markets, benchmark U.S. crude
CLU22,
-5.36%
gained 30 cents to $88.84 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $2.12 the previous session to $88.54. Brent crude
BRNV22,
-5.27%,
the price basis for international trading, advanced 22 cents to $94.34 per barrel. It fell $2.66 the previous session to $94.12.

The dollar
USDJPY,
-0.47%
gained to 133.14 yen from Thursday’s 132.91 yen.