Asian markets track Wall St higher, US jobs in focus

Asian markets rose on Tuesday, with Tokyo largely recovering from initial losses as expectations of a US interest rate rise and talk of more Japanese monetary easing pushed the yen down against the dollar.

After Monday's sell-off across most markets, fuelled by the prospect of higher US borrowing costs, investors returned to buying -- buoyed by a rally on Wall Street as fresh data indicated improvement in the world's top economy.

Bets on a rate rise this year have soared after Federal Reserve boss Janet Yellen said last week at the Jackson Hole symposium of central bankers that "the case for an increase in the federal funds rate has strengthened in recent months".

Attention now turns to the release on Friday of the US jobs report, seen as a guide to whether the Fed will move sooner rather than later.

"Without question, jobs day is always a monthly highlight, but given the Federal Reserve board's tilt at Jackson Hole, it plainly appears it will take a big surprise to derail a 2016 Fed hike expectation at this point," Stephen Innes, senior trader at OANDA, said in a note.

"Investor odds of lift-off are hovering near 70 percent for December and Friday's jobs data will offer more information about the probability of a hike in September than anything else."

The dollar rose to 102.42 yen from 101.88 yen in New York, with the Japanese unit also dragged down by comments from the country's top central banker suggesting a further loosening of monetary policy.

- Hike priced in -

The weaker yen could not help Japan's Nikkei index extend Monday's more than two percent rally, and it ended down 0.1 percent.

However, Hong Kong rose 0.9 percent, while Shanghai ended up 0.2 percent, Sydney gained 0.2 percent and Seoul rallied 0.4 percent. There were also gains in Singapore, Taipei and Wellington.

In early European trade London dipped 0.1 percent but Frankfurt and Paris each rose 0.4 percent.

Shares in New York ended well up after the Commerce Department reported US consumer spending saw a healthy rise in June, indicating third-quarter economic growth will be strong.

"The rate hike to some extent is priced in," Logan Best, vice president for securities trading at INTL FCStone Financial, told Bloomberg News.

"There’s a good case to be made that any kind of US rate hike would give weakness to the yen and that would give a tailwind to the Nikkei. The rest of the Asian markets won’t be impacted as dramatically as Japan as they are not as currency-driven."

Oil prices edged up slightly but made little inroads into the sharp losses suffered Monday on the back of the stronger dollar, which makes the commodity more expensive for buyers using weaker currencies.

West Texas Intermediate was up nine cents at $47.06 and Brent added two cents to $49.28.

- Key figures at 0800 GMT -

Tokyo - Nikkei 225: DOWN 0.1 percent at 16,725.35 (close)

Shanghai - Composite: UP 0.2 percent at 3,074.68 (close)

Hong Kong - Hang Seng: UP 0.9 percent at 23,016.11 (close)

London - FTSE 100: DOWN 0.1 percent at 6,830.16

Euro/dollar: DOWN at $1.1160 from $1.1187 

Dollar/yen: UP at 102.42 yen from 101.88 yen Monday

Pound/dollar: DOWN at $1.3071 from $1.3105

New York - DOW: UP 0.6 percent at 18,502.99 (close)

Source: AFP