Stocks track Wall St rally as US jobs data ease recession fears

HONG KONG, China — Asian stocks rallied Friday as investors breathed a sigh of relief after US jobs data soothed concerns that the world's top economy could tip into recession, bringing a painful week to a positive end.

Equities across the planet have seen big fluctuations since a closely watched gauge of the US labour market came in well below forecasts and fanned fears the Federal Reserve may have waited too long to cut interest rates.

The non-farm payrolls report last Friday came days after the US central bank hinted at a reduction in September and the Bank of Japan announced its second hike in 17 years, hinting at more to come.

Those decisions sent the yen soaring to just under 142 per dollar and caused a rapid unwinding of the so-called carry trade in which traders take advantage of the weaker currency to buy higher-yielding assets such as equities.

Equities went into meltdown on Monday, with the Nikkei 225 in Tokyo diving more than 12 percent in its heaviest one-day drop since Black Monday in 1987, with the stronger yen battering exporters.

However, while traders remain wracked with uncertainty, they have managed to claw back much of the loss suffered at the start of the week, helped by dovish comments from the BoJ that it would not lift rates while markets were being roiled.

Confidence was given an extra boost Thursday from news that fewer people than forecast had applied for unemployment benefits last week, tempering worries about the economy.

All three main indexes on Wall Street jumped, with the S&P 500 enjoying its best day since November 2022.

And Asia followed suit Friday.

Tokyo was helped by a weaker yen -- it was sitting above 147 to the dollar Friday -- while Hong Kong, Sydney, Manila and Seoul were more than one percent higher, with Taipei surging almost three percent.

Mumbai and Bangkok were also in positive territory along with London, Paris and Frankfurt.

However, Shanghai and Wellington edged down.

Data showing that Chinese inflation rose more than expected in July provided a much-needed optimistic view of the country's stuttering economy.

"The fallback in initial claims is consistent with the only modest deterioration in permanent layoffs