Asian shares: Asian shares join global rally before US jobs data

Asian shares posted early gains Friday after stocks and bonds rallied on Wall Street as further signs of a cooling labor market reinforced bets the Federal Reserve will cut rates this month.

Stocks rose in Japan, Australia and South Korea at the open. The Nikkei-225 index rose by more than 1% after President Donald Trump signed an executive order implementing his trade agreement with Japan. The S&P 500 added 0.8% to reach a new peak while the Nasdaq 100 rose 0.9%.

Treasuries extended a Thursday rally that saw the policy-sensitive US two-year yield fall three basis points to the lowest in around a year. Money markets are now almost fully pricing in a Fed reduction this month and see at least two by year-end.

The action reflected the latest readings on hiring and unemployment claims before Friday’s jobs data, which is expected to extend the weakest stretch of US job growth since the pandemic. Slowing demand, rising costs and Trump’s unpredictable trade policies have cooled hiring, adding pressure on the Fed to shore up the labor market.

“Many investors are clearly hoping for rate cuts, but it is important to remember to be careful what we wish for,” said Steve Sosnick at Interactive Brokers. “Data that show a gently decelerating but not dire labor market would suit that goal. Plunging data might bias the Fed to further cuts, but could also raise concerns that the central bank is too far behind the curve.”

Elsewhere, Trump signed an executive order Thursday implementing his trade agreement with Japan, under which the US will impose a maximum 15% tariff on most of its products.China’s stock markets will once again be in focus after shares fell more than 2% Thursday. The country’s financial regulators are considering a number of cooling measures for the stock market as they grow concerned about the speed of recent gains.Meanwhile, traders are now positioning themselves for the key jobs reading. Consensus forecasts peg nonfarm payrolls having grown 75,000 in August, which would mark a fourth straight month of job growth below 100,000. The unemployment rate is seen rising to 4.3% — the highest level since 2021.