Asian markets find footing as US jobs data, PMIs lift stocks

Published Fri, Jul 3, 2026 · 09:33 AM — Updated Fri, Jul 3, 2026 · 03:38 PM

[SINGAPORE] Stocks rose during the Asian trading session on Friday (Jul 3) after a lukewarm US jobs report poured cold water on the prospect of an imminent rate hike from the Federal Reserve and regional activity gauges pointed to an economic expansion during June.

After a shaky start, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 2.2 per cent following two consecutive days of declines.

South Korea’s Kospi swung between gains and losses, before surging more than 6 per cent as buyers pounced on battered chipmaker stocks.

S&P 500 e-mini futures rose 0.4 per cent, while Japan’s Nikkei 225 reversed early losses to trade 1.2 per cent higher.

Purchasing Managers’ Index (PMI) data released on Friday indicated increased activity across the region.

Japan’s services sector returned to expansion in June after stalling the previous month, while China’s services activity expanded at a slightly slower pace but overseas demand rose at the fastest rate in 20 months.

“The PMIs remain healthy by recent standards and still imply stronger economic momentum across Q2 as a whole,” analysts from Capital Economics said of the Chinese data.

US labour market cooling

US job growth slowed sharply in June and payroll gains for the prior two months were revised lower, according to data released on Thursday, pointing to a cooling labour market.

The unemployment rate dropped to 4.2 per cent last month from 4.3 per cent in May as workers left the labour force, pushing the participation rate to the lowest level in more than five years.

“The figures challenged the narrative that the Fed remains on track to hike in the second half of this year,” Westpac analysts wrote in a research report.

The tepid jobs data doused traders’ expectations of an imminent rate hike and raised the odds that the Fed will keep rates on hold until October.

Fed funds futures are pricing an implied 46.8 per cent probability that the US central bank will keep rates steady at its meeting on Sep 15 to 16, compared to a 35.8 per cent chance a day earlier, according to the CME Group’s FedWatch tool.

Overnight, stocks on Wall Street were a mixed bag as the S&P 500 was flat and the Nasdaq Composite slipped 0.8 per cent, while the Dow Jones Industrial Average rose to a record close.

The US market will be closed on Friday in observance of the Independence Day holiday.

Against the yen, the US dollar was flat at 161.06, with the greenback giving up gains as market liquidity was thinned by the holiday and traders remained on watch for intervention.

The Japanese currency has been choppy this week after Reuters reported on Thursday authorities may have adopted a new approach to their forays into the market.

The US dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.3 per cent at 100.71.

In early European trading, pan-region futures were up 0.3 per cent, German DAX futures were 0.4 per cent higher and FTSE futures nudged up 0.1 per cent.

In commodities, Brent crude futures rose 0.6 per cent to US$72.26 a barrel in Asia. Gold was up 1.2 per cent at US$4,174.16.

In cryptocurrencies, bitcoin was flat at US$61,549.17, while ether edged up 0.1 per cent to US$1,706.26. REUTERS