Waller's Disinflation Comments Fuel Asian Share Rally Ahead of US Jobs Data

Asian shares rallied ahead of the highly anticipated US jobs data release on Friday. The market's optimism was fueled by Federal Reserve Governor Christopher Waller's comments that recent data suggest some signs of disinflation, and if future reports confirm this trend, he would favor keeping interest rates steady at the upcoming policy meeting.

This shift in tone from a potential rate hike to holding rates steady led to a significant reduction in market expectations for a rate increase. The probability of a September rate hike dropped to 50%, down from around 63% just a day earlier.

The dollar also fell, losing ground against major peers as bond yields decreased, with the two-year yield falling to 4.3348%. This decline in yields helped the yen surge, which is set for its best weekly gain since late July when Japan and the US jointly intervened to stabilize it.