Asian Shares Rise on Strong U.S. Lead

Asian shares were broadly higher on Thursday, tracking a strong close in the U.S. equity market and solid U.S. economic data that saw the yen weaken.

The Nikkei Stock Average was up 0.7%, as the yen softened against the U.S. dollar, supporting local exporters. Meanwhile, the S&P ASX 200 was up 0.3%, the Hang Seng Index was 0.5% higher and Korea's Kospi rose 0.3%. Markets in China are closed for the Golden Week holiday.

At the start of Tokyo share trading, the yen weakened about 0.1% against the dollar. It is now about flat to the greenback.

Late Wednesday, the Institute for Supply Management released its September survey of demand seen by managers of U.S. service-sector firms. The survey reading jumped to 57.1, hitting an 11-month high and well above market consensus of 53. The dollar strengthened as a result, and the WSJ Dollar Index was recently up 0.1% against a basket of currencies.

"It is very much at the moment all about the U.S. dollar," said Gavin Parry, managing director at brokerage Parry International Trading in Hong Kong. "It is impacting the rest of the [Asian] region."

The weaker Japanese yen supported local exporters, with auto makers rising: Mazda Motor climbed 3.7%, Toyota Motor rose 1.4% and Nissan was 0.7% higher.

The share prices of Japanese banks also improved as fears about Deutsche Bank's health continued to subside. The Topix bank subsection extended gains for the fourth session in a row and was last up 2%.

Overnight, U.S. crude-oil prices surged more than 2% after data showed that U.S. crude stockpiles fell for the fifth consecutive week. Shares in energy companies led the S&P 500 higher, which rose 0.4% on Wednesday. WTI slipped back 27 cents in Asian trade, but was still hovering just below $50 a barrel. Japanese oil explorer Inpex rose 3.8% and Japan Petroleum Exploration was 3.5% higher.

Weaker-than-expected U.S. ADP employment data—a survey of payroll figures—suggested that the U.S. jobs market was softer than thought.

Companies across America added 154,000 workers to their ranks in September, while economists surveyed by The Wall Street Journal expected an increase of 173,000.

This has dampened expectations for a U.S. rate increase by year-end. According to CME Group's FedWatch tool, the likelihood of a rate rise in December has slipped to 59.8% from 63.4% a day earlier.

In the short-term, investors will look to the U.S. initial jobless claims later on Thursday and nonfarm payrolls on Friday, which should shed more light on the Federal Reserve's rate stance.

Write to Ese Erheriene at [e-mail]

(END) Dow Jones Newswires

October 05, 2016 23:45 ET (03:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.