London: Global stocks rose yesterday, anticipating an improvement in US monthly jobs data, while the dollar fell from a four-month high against the yen after Japan's new finance minister backed off his call for a weaker currency.
Crude oil prices slipped, extending losses the previous day on worries about tighter Chinese monetary policy. Yields on safe-haven government bonds ticked higher. The latest Reuters poll suggested the US economy stopped shedding jobs in December, as investors were more optimistic about the world's largest economy.
A poll of 84 economists on Thursday forecast non-farm payrolls would be flat in December after dropping by 11,000 in November, far fewer than in previous months.
The jobs report "is hopefully going to show us a steadily improving trend which will give us a bit more confidence," Justin Urquhart Stewart, director at Seven Investment Management, said.
Global equities measured in the MSCI All-Country World Index rose 0.2 per cent, hovering near a 15-month high.
In Europe, the FTSEurofirst 300 added 0.6 per cent and Japan's Nikkei average gained 1.1 per cent, hitting its highest close in 15 months.
US stock index futures were flat to up 0.1 per cent.
However, a strong jobs report would raise speculation that the US Federal Reserve could start tightening and even increase interest rates sooner than expected.
James Bullard, president of St. Louis Federal Reserve Bank, said uncertainty about inflation was mounting in the US, although price pressure remain subdued.
Overnight, other senior Fed officials placed different emphasis on inflation risks, with one warning failure to withdraw support policies soon enough could trigger inflation while another played down such risks.
Separately, data showed British factory gate inflation rose more than expected in December and at its fastest annual rate in nearly a year, while South Korea's central bank underscored its intention to raise rates as soon as February.
The dollar dipped 0.1 per cent against the yen to 93.19 after Naoto Kan, Japan's new finance minister, backed away from his call for a weaker yen and said currency levels should be determined by markets.
The greenback was also weaker against the euro at $1.4307, though the dollar was flat versus a basket of major currencies.
"The expectation is for the dollar to continue strengthening on the back of payrolls," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ. "The dollar could see some setback on a weaker reading, but that would just be a good opportunity to buy dollars."
Trends
- 0.2%: gains in MSCI All-Country World Index
- 0.1%: dollar's decline against the yen