Asian shares slipped on Friday as investors braced for US employment data that is expected to bolster the case for a Federal Reserve interest rate increase as early as next month.
MSCI’s broadest index of Asia-Pacific shares outside Japan edged down about 0.36%, though it remained on track for a 0.7% weekly rise, Reuters reported.
Japan’s Nikkei added 0.5%, poised for a 0.6% weekly gain. The Shanghai Composite pared earlier gains to climb 0.36%, putting it on track for a jump of 4.5% for the week.
Wall Street marked modest losses after a mixed spate of earnings, as investors awaited the non-farm payrolls report later this session.
On Thursday, US interest rates futures implied traders saw a 58% probability of a rate increase in December, according to CME Group’s FedWatch program, while US two-year treasury yields hit their highest levels in 4-1/2 years.
Economists expect the report to show that US employers added 180,000 jobs in October, more than September’s increase of 142,000 jobs.
Fed Chair Janet Yellen and New York Fed President William Dudley said this week that the US was ready for higher interest rates if upcoming economic data justified them.
Higher yields and rising expectations of a December rate hike lifted the dollar index, which last stood at 97.91, slightly lower than a three-month peak of 98.13 scaled overnight.
The dollar slipped 0.1% to 121.64 yen after touching a 2 1/2-month high of 122.01 on Thursday, while the euro added about 0.1% to $1.09 after dropping to a nadir of $1.08, its lowest level in more than three months.
The stronger dollar added further pressure to crude oil futures, which were already dragged down by oversupply concerns.
Other commodities also struggled, with London copper sliding to its lowest level in a month overnight. While it recovered 0.4% to $5,032.50 a ton, it was still set to end the week 1.6% lower, its third consecutive weekly loss.
Spot gold recovered to $1,108.06 an ounce from an eight-week low on Thursday, on track for a 2.9% loss for the week, the most in eight months.
