Wall Street's Lead Boosts Asian Stocks Ahead of US Jobs Data

Asian stocks tracked Wall Street's lead higher ahead of US jobs data, while bonds received some relief after Federal Reserve Governor Christopher Waller said recent data showed signs of disinflation. This suggests he may favor holding rates steady at this month's policy meeting.

The comments from Waller led to a reduction in the chance of a rate hike this month to 50% from about 63% a day ago, with futures scaling back expectations amid rising concerns over stubborn inflation and swelling government debt. Oil prices held near six-week highs, and investors remain wary of inflation risks.

The dollar dropped as lower yields took hold, fetching 99 against its major peers after skidding 0.6% overnight. The yen built on gains this week with the dollar down 1.8% to 156.32 yen, raising the prospect of a larger increase or back-to-back tightening.

Markets now imply a 75% chance of a September move and a hike by October is fully priced in. Analysts at IG said it could be pre-positioning ahead of a potentially soft non-farm payrolls report today and a potentially hawkish BOJ meeting in two weeks.