Asia: Shares climb with bonds as oil holds above US$41 before jobs

[WELLINGTON] Asian stocks rose amid a surge in government debt after the Bank of England's policy easing soothed concern over the impact of the Brexit vote and as oil held above US$41 a barrel. The dollar meandered ahead of US jobs data.

Consumer and energy stocks drove equity gains, paring the Asian benchmark's first weekly drop in about a month. Yields on 10-year Australian and Japanese debt sank at least two basis points, as the notes joined a rally in bonds globally.

The yen was little changed for a second day against the dollar, while some high-yielding currencies gained. US crude was headed for its first weekly advance in three weeks amid easing concern over a glut.

The BOE cut growth forecasts for the UK by the most ever as policy makers unveiled a stimulus package aimed at containing the fallout from the British decision to leave the European Union.

Investors are now switching their focus to Friday's update on nonfarm payrolls in the US. Economists predict the report will show continued improvement in the labour market, a key factor for the Federal Reserve, which is mulling whether to stick to its plan to continue tightening monetary policy in 2016.

"The most important development overnight was that the high expectations for global monetary and fiscal easing are steadily being met," Angus Nicholson, a market analyst in Melbourne at IG Ltd, said in an e-mail to clients.

"Oil market concerns also continued to dissipate. Barring a major miss in the nonfarm payrolls, US equities are likely to be keen to play catch-up in today's session, once that event risk is out of the way."

Payrolls probably rose by 180,000 workers in July, following a 287,000-person increase in June, according to the median of economists' estimates compiled by Bloomberg. The jobless rate is projected to fall to 4.8 per cent, from 4.9 per cent in the previous month.

Before the US data, Taiwan and the Philippines are due to update on consumer prices, Malaysia reports on trade and a reading on Indonesian gross domestic product is scheduled.

The Reserve Bank of Australia also releases a monetary policy statement after cutting interest rates to a fresh record low this week.

The MSCI Asia Pacific Index climbed 0.2 per cent as of 9:27 am Tokyo time, with groups of consumer-discretionary shares and energy producers rising at least 0.5 per cent.

The Topix index in Japan rose for a second day, advancing 0.2 per cent to trim its decline in the week to 2.8 per cent, still the most in a month. In Australia, the S&P/ASX 200 Index increased 0.4 per cent, as the Kospi index in Seoul added 0.4 per cent.

New Zealand's S&P/NZX 50 Index was up 0.2 per cent after rising 0.3 per cent last session. The measure is due to snap a five-week run of gains, falling 0.5 per cent so far this week.

Futures on the S&P 500 Index were up 0.1 per cent to 2,161.50, after the underlying benchmark added less than one point on Thursday.

The US "employment number is the catalyst for the market - that's what is going to rule the pricing trends over the next few weeks," said Jim Davis, regional investment manager at the Private Client Reserve of US Bank, which oversees US$128 billion.

In Hong Kong, Hang Seng and Hang Seng China Enterprises index futures rose at least 0.4 per cent in most recent trading, while contracts on the FTSE China A50 Index increased 0.2 per cent.

BLOOMBERG