Asian markets wait on US jobs data as dollar holds firm

Summary:

• US nonfarm payrolls were the focus, with investors expecting around 90,000 new jobs and the unemployment rate unchanged at 4.1%.
• The dollar stayed close to its strongest point since May 2025, while the Australian and New Zealand dollars remained steady.
• Gold fell to roughly $4,140 an ounce and then bounced back; oil moved little after Brent surged past $100 on Thursday.
• Tokyo's core CPI accelerated to 2.7% in September, the quickest rise in 10 months, with the core-core gauge at 3.0%.
• Japan's economy minister said excessively loose policy is no longer necessary; the finance minister aimed to streamline idle funds worth about 7 trillion yen.
• Chinese mainland and Indian markets were shut, while Hong Kong traded again without Stock Connect.

Markets

Trading across Asia was quiet on Friday, with market participants awaiting the US employment report for September, scheduled for release later in the day. The data is projected to show around 90,000 jobs added and the jobless rate holding at 4.1%. The dollar index had reached its highest level since May 2025 during the previous session, keeping the greenback firm, although the Australian and New Zealand currencies held up. Gold eased to about $4,140 an ounce before clawing back losses, and oil was roughly flat after Brent closed above $102 on Thursday, supported by China's fuel export halt and reports of additional US troop deployments to the Middle East.

Japan

Inflation in Tokyo accelerated in September. Tokyo's core consumer price index climbed 2.7% year on year, outpacing the 2.4% consensus and marking the fastest reading in 10 months. A separate gauge that strips out fresh food and energy rose to 3.0%. Price growth in services also strengthened, adding to the argument for another rate increase by the Bank of Japan, whose next meeting is scheduled for October 29-30. The unemployment rate in Japan ticked up to 2.5% in August.

Ministerial comments also pointed toward a tighter policy stance. Economy Minister Kiuchi said Japan has left deflation behind, making excessively loose monetary policy unnecessary. Finance Minister Katayama, meanwhile, said she plans to drastically trim roughly 200 dormant government funds worth around 7 trillion yen under a spending review modelled on DOGE.

Fed and rates

The question of how much more tightening the Federal Reserve must deliver stayed active. Dallas Fed President Lorie Logan argued that borrowing costs must climb by at least 50 more basis points. Goldman Sachs, meanwhile, shifted its call for the next rate rise to December and flagged a solid probability that no additional moves will be needed. US 10-year Treasury yields had hit their highest since 2002 on Thursday before pulling back. UBS described market pricing of nearly four additional hikes as too aggressive.

Region

New Zealand consumer confidence slipped to 97.6 in September, and weekly figures pointed to sentiment weakening as oil prices jumped in the middle of the month. South Korean exports rose roughly 84% year on year, though MUFG said Asian currencies are still being driven by US yields and the dollar ahead of the payrolls data.

Mainland China's stock exchanges remain shut for Golden Week until October 8, while Hong Kong resumed trading without Stock Connect flows. Indian markets are shut for Gandhi Jayanti and will reopen on Monday.

Energy

Diesel supply stayed in the spotlight after Washington told Germany and France to tap emergency reserves or risk a US export ban. European Union energy officials are set to take up the matter on Friday.