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Asia markets rise as Fed comments and jobs data suggest rate cuts

Asian stocks rose on Thursday, mainly due to dovish remarks from Federal Reserve officials. A smooth auction of Japanese superlong debt also helped calm investor nerves.

Australia, India, and Japan saw their shares rise, while Chinese shares dropped the most since April, on reports that regulatory intervention was being taken to curb runaway speculation.

MSCI's broadest Asia-Pacific share index outside Japan gave up its early gains, and fell 0.2%. China was the main culprit, as it lost ground.

Bloomberg News reported that financial regulators are preparing cooling measures to cool the market. The CSI 300 dropped as much as 2,6%.

U.S. Stock Futures rose by 0.1%, as investors were encouraged by the comments of Fed officials and the smooth auction of 30-year Japanese Government Bonds. This attracted buyers to beaten-down stocks.

The Nikkei rose 1.6%, and Australian shares gained 1% after their largest one-day drop since April.

Tony Sycamore is a market analyst with IG Sydney. He said, "We had one or two weak days but dip-buyers stepped in."

He added that many people see this September weakness as a good opportunity to buy, with the economy still growing. This is a positive backdrop for equity markets.

India's benchmark Sensex rose 1.1% at the opening of markets, after the government slashed taxes on various goods to boost consumption and counteract U.S. Tariffs.

Investors began September with a gloomy mood as a sale of longer-dated bonds dampened investor confidence in advance of Friday's crucial non-farm payrolls in the United States.

The bond market sold-off overnight, but worries about the fiscal health in major economies, from Japan to the United States, and Britain, kept borrowing costs for long-term loans near their multi-year-highs.

Investors received a boost in confidence after Federal Reserve officials including Governor Christopher Waller expressed their support for rate reductions in the coming months.

Stephen Miran, the President Donald Trump nominee for an open Federal Reserve Board seat, has said that he will work to preserve independence of the central bank, before Thursday's confirmation hearing in front of the Senate Banking Committee.

The latest "JOLTS", or Job Openings Report, released on Wednesday showed that job openings were lower than expected. This boosted market bets of a rate reduction at the Fed meeting scheduled for later in the month.

Thilan Wickramasinghe is the head of research for Maybank in Singapore.

The Fed is under pressure to lower rates this month, as the markets are eagerly awaiting an optimistic message.

The Federal Reserve’s “Beige Book” painted a mixed image of the U.S. economy, which seemed to highlight monetary policymakers’ concerns. Analysts from ING described it as "bleak" and said that it contained "a lot of tariff warnings about prices".

The CME Group's FedWatch showed that traders are now pricing a 99.7% chance of a rate cut at the Fed meeting in September.

The yield on 10-year Treasury bills rose to 4,2226% from its U.S. closing of 4.211% Wednesday. The two-year rate, which increases with traders' expectation of higher Fed Funds rates, reached 3.6187%, compared to a U.S. closing of 3.612%.

The dollar was up by 0.1% against the Japanese yen, at 148.25. It remained within the range of trading it has been in since August began.

The euro currency fell 0.1% to $1.1650 while the dollar index, which measures the currency in relation to a basket other major trading partners' currencies, rose 0.1% to 98.239.

Brent crude fell 0.6% on the commodities market to $67.17 per barrel.

Gold spot prices fell 0.8% to $3529.94 an ounce, after reaching a record high on Wednesday.

(source: Reuters)