Asian markets news | Shares come off 11-month lows amid plunge in oil prices, softer US labour data

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 per cent.

Hong Kong's Hang Seng index (.HSI) advanced 0.3 per cent. Image source: Reuters

Asian markets news: Shares rebounded from 11-month lows on Thursday as a plunge in oil prices and softer U.S. labour data helped pull Treasury yields off 16-year peaks, although a looming U.S. payrolls report could make or break the rally.

Tracking overnight gains on Wall Street, MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.6 per cent. Japan's Nikkei (.N225) climbed 1.2 per cent.

Hong Kong's Hang Seng index (.HSI) advanced 0.3 per cent. China's mainland markets remain closed for holidays.

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Overnight, the rout in Treasuries took a breather after a cooler-than-expected U.S. private payrolls report and a 5 per cent drop in oil prices offered some comfort to investors. Risk sentiment has taken a beating on the view that interest rates will stay high for longer.

Ten-year yields eased 2 basis points to 4.7163 per cent on Thursday, continuing their overnight retreat from a fresh 16-year high of 4.8840 per cent.

Much will depend on U.S. non-farm payrolls data on Friday. Economists expect 170,000 jobs created in September, slowing from 187,000 in August, while the jobless rate likely ticked lower to 3.7 per cent from 3.8 per cent.

"I think those numbers will have to be a long way from those expectations for it to move the dial for the Fed, but numbers close to the expectations might serve to calm jitters in the Treasury market," said Stephen Miller, an investment strategist at GSFM, a Sydney-based fund.

"Given where Treasury yields are at the moment, I think the risks are pretty evenly balanced between them on the downside and on the upside."

The recent spike in yields has meant they have reached levels where, if sustained, would see a significant tightening in financial conditions, bolstering the case for no further hikes from the Fed. The CME FedTool now prices in a 23 per cent chance of a hike in November, compared with 28 per cent a day ago.

The U.S. dollar came off highs and Wall Street rebounded, led by the tech-heavy Nasdaq (.IXIC) which rose more than 1 per cent overnight.

The battered yen also got a much-needed reprieve, rallying 0.5 per cent on Thursday to 148.34 per dollar. Traders are continuing to wonder whether a sharp rebound away from the 150 level on Tuesday was due to intervention from Japanese authorities.

"Whether or not the BoJ intervened, we still judge the risk of intervention is high while USD/JPY follows U.S. Treasury yields higher," said Joseph Capurso, head of international economics at CBA.

Despite the renewed strength of the U.S. dollar, analysts still see weakness for it ahead, a Reuters poll showed.

Oil prices gained on Thursday after losing a colossal 5 per cent to where they were at the beginning of the year. Brent crude futures rose 0.3 per cent to $86.10 per barrel and U.S. West Texas Intermediate crude futures were also up 0.3 per cent at $84.45.

The price of gold gained 0.3 per cent to $1,826.69 per ounce.

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