By Mia Lamar
Asian stocks traded broadly higher Friday, paced by a record-setting session on Wall Street.
Investors in Asia were inspired by Thursday's rally in U.S. stocks, which pushed the S&P 500 index (SPX) over the 1,700 mark for the first time and the Dow Jones Industrial Average (DJI) to its own record high. Attention now turns to the closely-watched monthly U.S. jobs report, slated for release later Friday.
U.S. data has taken on heightened significance as investors prepare for any indication that the Federal Reserve will start winding down its $85-billion-a-month bond buying program. Economists polled by Dow Jones expect July nonfarm payrolls to increase by a median 175,000 compared with 195,000 added in June. The July unemployment rate is forecast to edge down to 7.5% from 7.6% in June.
"Numbers along those lines would probably keep the Fed on track for tapering at the September meeting, with one more employment report scheduled before then," said Jim O'Sullivan, chief U.S. economist for High Frequency Economics. The firm expects a 190,000 increase in payrolls.
Australia's S&P/ASX 200 closed 1.1% higher at 5116.80, its highest level since late May. Heavily-weighted bank shares bounced back from Thursday's losses after a report on possible new bank taxes was revised, easing some profit concerns. Westpac Banking Corp. (WBK) climbed 1.9% and Australia and New Zealand Banking Group (ANZBY) jumped 1.8%.
The Australian dollar (AUDUSD) continued to tumble Friday, hitting a fresh three-year low of $0.8889 as the U.S. dollar held firm and investors anticipated further interest rate cuts from the Reserve Bank of Australia.
In Tokyo, the Nikkei Stock Average climbed 3.3% to 14,466.16 after the U.S. dollar surged against the yen overnight. The greenback is expected to trade even higher in the event of a strong U.S. jobs report.
Monetary easing in Japan remains a major theme, and compared with dollar-yen levels reached as recently as early July, "there is still plenty of runway for [U.S. dollar] longs," said Patrick Bennett, a foreign exchange strategist at Canadian Imperial Bank of Commerce in Hong Kong.
The dollar (USDJPY) was recently at Yen99.66, compared with Yen99.56 late Thursday in New York.
Hong Kong's Hang Seng Index rose 0.5% to 22,190.97 following the U.S. rally. Better-than-expected earnings from tycoon Li Ka-Shing's Cheung Kong (CHEUY) property firm and Hutchison Whampoa (HUWHY) conglomerate added strength. Hutchison Whampoa shares closed 4.5% higher; Cheung Kong rose 1.7%.
China's Shanghai Composite Index ended flat at 2029.42. Analysts said investors are awaiting fresh cues on the direction of the country's reform plans before building sizable positions.
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(END) Dow Jones Newswires
August 02, 2013 05:01 ET (09:01 GMT)
Copyright (c) 2013 Dow Jones & Company, Inc.
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