TOKYO: Asian stocks edged up and the dollar index slumped on Friday, as investors looked toward the U.S. nonfarm payrolls report later in the session for confirmation that the U.S. employment picture has improved.
The euro remained near its overnight highs after the European Central Bank held steady as expected and said conditions in the euro zone do not yet warrant any change in policy.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up about 0.1 percent, and Australian shares added 0.2 percent.
Data on Thursday showed the number of Americans filing new claims for unemployment benefits slipped to a three-month low last week, a sign of strength in a labor market recently clobbered by severe winter weather.
The weekly claims data has no bearing on Friday’s employment report because it falls outside the reference period for the survey, but it suggested labor market fundamentals remain solid.
Nonfarm payrolls are forecast to have increased by 150,000 jobs in February, according to a Reuters survey of economists, up from the weather-depressed gains of 113,000 in January and 75,000 in December.
Unless the increase falls below 100,000, the U.S. Federal Reserve will likely stick to its stimulus reduction course when it meets later this month, Kathy Lien, managing director at BK Asset Management in New York, said in a note to clients.
“Yet with more snowstorms hitting the country in the first 2 weeks of February, we cannot rule out another weak release,” she added.
The dollar index, which weighs the dollar against a basket of major currencies, was at 79.649, after skidding as low as 79.590, its lowest since late October.
An easing in the threat of imminent conflict in the Ukraine rekindled investors’ appetite for risk. President Barack Obama urged Russian President Vladimir Putin to accept the terms of a potential diplomatic solution in an hour-long phone call.
The ECB’s decision to stand pat pushed the euro to its highest level since late December. It was steady in Asia at $1.3861, after rising as high as $1.38735 on the EBS trading platform in the wake of the central bank’s announcement.
The euro also remained firm against its Japanese counterpart, buying 142.86 yen after touching 142.99 yen earlier on Friday, its highest since Jan. 10.
The yen also slipped against the greenback to its lowest levels since late January, with the dollar buying 103.06 yen, inching away from a one-month low of 101.20 hit on Monday.