European and Asian shares were mostly higher on Friday ahead of a report on U.S. employment that is expected to show the economy’s strength despite high interest rates. Oil prices and U.S. futures were also up. In Germany, the DAX gained 0.3%, while the CAC 40 in Paris rose 0.5% and the FTSE 100 in London added 0.3%. Markets in Tokyo and mainland China were closed for holidays, and the Japanese yen strengthened slightly against the U.S. dollar due to central bank intervention to prevent further depreciation.
The Bank of Japan recently abandoned its negative interest rate policy and raised its benchmark rate as a response to the weaker yen. The government reportedly spent billions of yen in reserves to stabilize the currency against the dollar. While a weak yen benefits Japanese companies with overseas revenues, it poses challenges for corporate planning and raises costs for imports of essential commodities. The dollar was trading lower against the yen and the euro on Friday.
In Asian trading, Hong Kong’s Hang Seng surged 1.5% while technology shares saw gains amid fresh moves by Chinese leaders to stimulate their economy. E-commerce giant Alibaba and other tech stocks in the region experienced significant increases. On Thursday, the S&P 500 rose followed by gains in the Dow and the Nasdaq composite. The U.S. government is set to report on employment numbers, with expectations for a slowdown in hiring despite a positive signal of fewer workers applying for unemployment benefits.
The U.S. economy is facing challenges in balancing strength to avoid a recession while not worsening inflation rates already at a standstill. The Federal Reserve’s recent comments suggest a delay in interest rate cuts due to persistent inflation levels. In energy trading, U.S. benchmark crude oil and Brent crude both saw slight increases in prices. Overall, the global markets are cautiously optimistic amidst economic uncertainties and ongoing efforts to stimulate growth in key sectors.
