Market Overview

Asian equities rose on Thursday as a pullback in global bond yields and steadier oil prices lifted risk appetite, while investors awaited U.S. non‑farm payroll data for clues on the Federal Reserve’s policy path.

Bond and Yield Movements

U.S. 10‑year Treasury yields fell to 4.784% after reaching multi‑year highs, and the benchmark 10‑year Japanese government bond yield eased about five basis points to 2.97% following a brief breach of the 3% level – the first such occurrence since 1996. The decline in yields contributed to the equity rally across the region.

Equity Performance

  • In Tokyo, the Nikkei 225 edged up 0.3% and the broader TOPIX index rose 1%, with trading houses leading gains.
  • Mitsubishi Corp (TYO:8058) surged nearly 5% (5.16% on the ticker screen) after comments from Berkshire Hathaway CEO Greg Abel reaffirming the conglomerate’s long‑term commitment to its Japanese investments.
  • Berkshire Hathaway, which holds stakes of more than 10% in major Japanese trading houses, signalled the possibility of increasing those holdings, further buoying financial‑sector stocks.
  • South Korea’s KOSPI advanced 1.5% and Singapore’s Straits Times Index gained 0.7%.
  • China’s Shanghai Composite and the CSI 300 each climbed 0.5%, while Hong Kong’s Hang Seng index traded largely flat.
  • Australia’s S&P/ASX 200 rose 0.5%.
  • Futures tied to India’s Nifty 50 were largely unchanged.

Commodity and Energy Outlook

Oil prices edged lower after a three‑day rally, as investors remained cautious about renewed U.S.–Iran military exchanges that could affect energy supplies.

Economic Data Highlights

  • China’s private services PMI rose to 51.4 in August, up from 50.4 in July and above the 50.6 forecast, indicating stronger domestic demand, faster new‑business growth, and a fourth consecutive month of job creation. This contrasted with the official services gauge, which still signalled contraction.
  • Japan’s services sector expanded at its fastest pace in five months in August, adding to evidence of resilient domestic activity and potentially strengthening the case for further Bank of Japan policy tightening.
  • Australia reported a July trade surplus that beat expectations, although the surplus narrowed from the previous month as exports fell 3.3% month‑on‑month.

Outlook and Market Sentiment

Investors now look ahead to Friday’s U.S. non‑farm payroll report. CME Group’s FedWatch tool shows roughly a two‑thirds probability of a 25‑basis‑point rate hike by the Fed this month, keeping market focus on U.S. employment data for guidance on future monetary policy.