Asian markets steady ahead of US payrolls data

Asian equities were poised to end a turbulent week on a steady note, with Thailand's stocks leading the charge on Friday, while currencies edged higher ahead of crucial US monthly payrolls data that could set the stage for outsized rate cuts.

The MSCI Emerging Markets index increased 0.4 per cent on Friday, but was on track for a weekly decline of more than 2 per cent.

Thailand's benchmark stock index gained 1.8 per cent to its highest since Jan. 5 and was on track for its strongest weekly rise since January 2021 with a near 5 per cent jump as a stabilising political environment and measures taken to boost capital flows improved risk appetite.

Taiwan's shares rose 1.1 per cent, but were poised for their biggest weekly drop since mid-April. Stocks in Jakarta advanced 1 per cent to a record high of 7,754.48.

Market focus was on the US nonfarm payrolls data due later in the day and the report is expected to influence the size of the interest rate cut that the US Federal Reserve will likely deliver on September 18.

Traders view a quarter-point reduction as the more probable action, but they also assign about a 49 per cent chance to a 50-basis-point cut, according to rate futures contracts.

"A much weaker report may further raise concerns about its cooling labour market," said Christopher Wong, a currency strategist at OCBC.

"Risk-off trades may pressure high-beta FX, including AUD, NZD, KRW, while JPY, CHF and to some extent, USD can benefit."

Asian currencies traded higher, with Thailand's baht, the Taiwanese dollar, and South Korea's won gaining 0.2 per cent, 0.3 per cent, and 0.4 per cent, respectively.

Indonesia's rupiah and Malaysia's ringgit added 0.2 per cent each.

Mixed US data has heightened concerns about economic growth in the world's largest economy and tarnished the dollar's allure.

The dollar index, a measure against six major peers, hovered near a one-week low after slipping about 0.2 per cent overnight.

The MSCI's emerging market currencies index was last up 0.3 per cent. It has been trading higher for the past six weeks.

This week, inflation data from Asia heightened expectations for rate cuts. Inflation in Thailand and the Philippines came in lower than expected for last month and fell to a 3-1/2-year low in South Korea, while price pressures in Indonesia were table.

"BSP (Bangko Sentral ng Pilipinas) is likely to follow through with additional rate cuts over the coming quarters, while Bank Indonesia and Bank of Korea may also start easing within this year," said Frances Cheung, a rates strategist at OCBC.

In Malaysia, the central bank maintained its overnight policy rate at 3.00 per cent for the eighth consecutive meeting on Thursday.