Asian Stocks Rise as Fading Fed Rate-Hike Prospects Overcome AI Jitters

By Ronnie Harui

Asian stocks rose Friday morning as fading prospects for Federal Reserve interest-rate increases outweighed lingering concerns over excessive investment in artificial-intelligence infrastructure.

U.S. employers added 57,000 new jobs in June, the Labor Department said Thursday, falling short of economists' estimates for a gain of 115,000 jobs. This spurred investors to scale back their expectations for rate increases by the Fed this summer.

"The main theme was weaker-than-expected U.S. jobs data and another sell-off in semiconductor stocks," Commerzbank Research analysts said in a research report. "The Fed funds futures are pricing in 30bp hike by year-end compared to 36bp on Wednesday," the analysts added.

Japan's Nikkei Stock Average rose 0.3%, South Korea's Kospi gained 1.1%, and Hong Kong's Hang Seng Index added 1.4%.

Meanwhile, the yen weakened against most other G-10 and Asian currencies on a possible technical correction. The yen strengthened notably overnight after the softer U.S. nonfarm payrolls report led traders to unwind some long dollar positions, particularly against the yen.

However, "with U.S. markets closed for the Independence day celebrations, currency liquidity will be thin, an ideal time [for intervention] to have a large impact on the market," said Joseph Capurso, head of Foreign Exchange, International and Geoeconomics at CBA. Japan's finance ministry has surprised markets with interventions during public holidays in the past, he noted.

Japan's finance minister, Satsuki Katayama, reiterated Friday morning that the government is ready to take appropriate action in the foreign-exchange market as needed, and remains in close communication with the U.S. regarding the market.

The dollar was recently is 0.1% higher at 161.25 yen.

Write to Ronnie Harui at ronnie.harui@wsj.com

(END) Dow Jones Newswires

July 02, 2026 22:12 ET (02:12 GMT)