Asian stocks and oil both rose to eight-week highs and emerging-market currencies strengthened ahead of key U.S. jobs data and the start of the Chinese national legislature's annual gathering.
The MSCI Asia Pacific Index of shares and crude were both headed for weekly gains of more than 5 per cent. The Bloomberg JPMorgan Asia Dollar Index climbed for a fifth day as Indonesia's rupiah advanced to a nine-month high. China's yuan strengthened after the central bank raised its daily fixing by the most in about three weeks. Gold fell 0.2 per cent, after entering a bull market on Thursday, and copper rose to the highest level since November.
Friday's report on U.S. nonfarm payrolls will give investors further insight into the health of the world's biggest economy and the likelihood of further interest-rate hikes by the Federal Reserve, while China will announce its plans to revive growth when an annual meeting of the National People's Congress gets under way on Saturday. Global equities have recouped more than half of this year's losses since sinking to a 2 1/2-year low on Feb. 11 amid improving U.S. data and monetary stimulus in China.
"U.S. data continues to shine, oil continues to firm and risk appetite is coming back into all aspects of the markets," said Angus Nicholson, market analyst at IG Ltd. in Melbourne. "Expectations will be quite high for an announcement of significant further fiscal spending from China's National Party Congress."
The U.S. jobs data is forecast to show hiring picked up in February while wage gains slowed from the fastest pace in a year. Fed funds futures are pricing in a less than one-in-10 chance of a rate increase at the end of the Fed's next meeting on March 16, the probability of a boost by June is 35 per cent, up from 24 per cent a week ago.
Chinese Premier Li Keqiang is likely to confirm this weekend a shift in the monetary policy stance from "prudent" to "prudent with a slight easing bias," says Tom Orlik, chief Asia economist at Bloomberg Intelligence in Beijing. A fiscal deficit target for the year will also be set and Vice Finance Minister Zhu Guangyao has said it will be higher than the 2.3 per cent goal announced for 2015.
Stocks The MSCI Asia Pacific Index rose 0.3 per cent as of 12:26 p.m. Tokyo time, headed for the highest close since Jan. 6. Japan's Topix added 0.1 per cent, poised for a weekly gain of 4.5 per cent, and Hong Kong's Hang Seng Index rallied 0.5 per cent. The Shanghai Composite Index fell 0.8 per cent.
Futures on the Standard & Poor's 500 Index advanced 0.1 per cent, while contracts on the U.K.'s FTSE 100 Index climbed 0.7 per cent. Brazil's benchmark moved into a bull market last session, closing more than 20 per cent up from its most recent low, amid speculation President Dilma Rousseff will be impeached.
West Texas Intermediate crude rose 0.8 per cent to $34.83 a barrel, extending this week's advance to 6.3 per cent. Key OPEC members intend to meet with other producers in Russia on March 20 to renew talks on an agreement to freeze output and there will be a "dramatic price movement" when that takes place, Nigerian Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu said Thursday.
Gold fell 0.2 per cent on the spot market, after jumping 2 per cent last session to its highest close in a month. Copper rallied 0.6 per cent in London.
The Asia Dollar Index, which tracks the region's 10 most– used currencies excluding the yen, was set for its highest close in three weeks. South Korea's won rose 0.7 per cent versus the greenback, buoyed by about $1-billion of overseas money that flowed into the nation's stocks this week. The rupiah strengthened as much as 0.8 per cent. The U.S. currency fell this week against all 31 major peers.
"There's been a retracement in the dollar generally," said Patrick Bennett, a strategist at Canadian Imperial Bank of Commerce in Hong Kong. "We've seen also that some portfolio flows have returned to Korea."
The yuan strengthened 0.18 per cent, climbing for a fourth day after the People's Bank of China boosted its reference rate for the currency by 0.2 per cent. The exchange rate is managed with reference to a basket of currencies but isn't strictly pegged, Deputy Governor Yi Gang was cited as saying in a Shanghai Securities News report.
Negative yields on Japanese bonds with maturities of up to a decade spurred demand for longer-term securities. The 20-year yield fell by as much as 4.5 basis points to a record 0.42 per cent.
Ten-year U.S. Treasuries yielded 1.83 per cent, seven basis points more than a week ago. They were little changed on Friday.