Asian Shares Hitch a Ride on Wall Street's Record

Bareksa.com - An index of Asian shares neared a six-and-half-year peak on Friday and was poised for a weekly gain, after upbeat U.S. economic data sparked another record close on Wall Street.

Still, investors were cautious ahead of a speech by Federal Reserve Chair Janet Yellen later in the day at the annual gathering of central bankers in Jackson Hole, Wyoming, which will be studied for any fresh signals about the timing of U.S. interest rate increases.

Financial spreadbetters expected Britain's FTSE 100 to open 2 points lower, or down 0.03 percent; Germany's DAX to open 5 points lower, or down 0.05 percent; and France's CAC 40 to open 3 points lower, or down 0.07 percent.

"European equities are set to open flat as traders turn cautious. With little in the way of economic data out today attention turns towards the Jackson Hole Symposium where traders will look for further clarity on global interest rates," Jonathan Sudaria, a dealer at Capital Spreads, said in a note to clients on Friday.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.6 percent, on track for a weekly gain of about 0.9 percent and within a few points of its July 30 high, which was its loftiest level since January 2008.

Japan's Nikkei stock average erased earlier gains and shed 0.3 percent, breaking its nine-session winning streak but still marking a robust 1.4 percent weekly gain.

U.S. data on Thursday showed home resales rose to a 10-month high in July, factory activity in the mid-Atlantic region hit its highest level since March 2011 in August, and a gauge of future economic activity grew solidly last month.

The data lifted U.S. shares, with the S&P 500 ending at a fresh record. S&P 500 e-mini futures were up 0.1 percent in Asia, which could portend more U.S. gains later in the day.

Kansas City Fed President Esther George told CNBC on Thursday the time has come for higher rates, while less hawkish San Francisco Fed President John Williams said the bank should wait until the summer of 2015.

Minutes from the Fed's July meeting on Wednesday showed policymakers debated whether interest rates should be raised earlier given a surprisingly strong job market recovery.

The latest data and the minutes helped U.S. Treasury yields pull away from recent lows, with the yield on the benchmark 10-year U.S. Treasury note at 2.405 percent in Asia, compared with its U.S. close of 2.407 percent on Thursday. It dropped as low as 2.30 percent a week ago, its lowest since June 2013.

The dollar hovered just below its 2014 peak against a basket of major currencies Friday, with the dollar index edging down on the day to 82.071.

The dollar also inched lower against its Japanese counterpart to 103.69 yen, after hitting an overnight high of 103.97, in sight of its April peak of 104.13 yen.

The euro steadied at $1.3296, after upbeat German data helped it pull away from an 11-month trough of $1.3242 plumbed on Thursday.

Markit's flash composite Purchasing Managers' Index for Germany was 54.9 for August, well above the 50 mark that separates economic expansion from contraction, reassuring investors about Europe's biggest economy.

In commodities trading, spot gold rose 0.2 percent to $1,279.90 an ounce, after losing 1.3 percent on Thursday to a two-month low, as speculation about an early U.S. interest rate hike sparked a technical selloff after prices broke below a key support level.

U.S. crude was slightly higher at $93.98 a barrel, but still set to post a fifth straight weekly fall. (Source : Reuters)