Asian shares looked set on Friday to post their strongest week in five months as global investors returned to riskier assets after a string of positive U.S. economic data and a bounce in oil and commodity prices.
The rebound could continue if the February U.S. employment report later in the session shows job gains but remains weak enough to discourage rate increases in the near term.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent to the highest in almost two months. That put in on track for a 5.4 percent gain for the week, the its strongest weekly performance since October.
Japan’s Nikkei .N225 was little changed on the day but poised for a weekly gain of 4.7 percent.
“Globally, markets are rolling back the extreme risk-off trading they did in January and February,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “Part of the reason is that the Fed seems to be easing its insistence on raising rates.”
Chinese shares, however, failed to gain from the optimism, with the Shanghai Composite index .SSEC down 0.5 percent, while the CSI 300 .CSI300 was little changed. Investors are awaiting the start of the annual meeting of China’s parliament on Saturday, which will map out economic goals for the next five years.
The MSCI World equity index covering 46 markets .MIWD00000PUS held near its two-month high touched on Thursday.
The rally was led by emerging markets, with a measure of emerging-markets shares .MSCIEF rising 0.4 percent on Friday for a sixth day of gains, its longest winning streak since October.
The biggest move on Thursday came from Brazil’s Bovespa index .BVSP, which rose more than 5 percent, its biggest gain in six years, on news that President Dilma Rousseff could be implicated in a sweeping corruption scandal.
That encouraged investors who blame her administration’s policies for driving Brazil into deep recession. Read more