Asian markets rise as US data soothes rate fears

Hong Kong - Asian markets on Friday tracked a rally on Wall Street after another round of below-par US data doused expectations for a Federal Reserve interest rate hike this month.

Equities globally have suffered during a volatile week as top Fed officials gave conflicting views on the need for tighter monetary policy, fuelling uncertainty across trading floors.

But the chances of a move at next week's policy meeting were diminished on Thursday with the release of lacklustre retail sales figures as well as weak readings on industrial output and wholesale inflation.

All three indexes in New York surged more than one percent, which in turn filtered through to Asia, where trade was thinned by public holidays.

Tokyo ended the morning 0.4% higher, while Sydney jumped more than one percent, Singapore added 0.8% and Wellington climbed 0.9%.

Shanghai, Hong Kong, Seoul, Kuala Lumpur and Taipei were closed for public holidays.

"With nothing in the economic numbers to say US rates should be moving up, and growing signs of losing momentum, expectations have largely diminished toward the Fed doing anything in September," Cameron Bagrie, chief economist in Wellington at ANZ Bank New Zealand, said in a note to clients.

"The market is drifting back toward the view they might do nothing for quite a while."

The dollar retreated as the slim likelihood of a rate hike all but disappeared. The greenback slipped to ¥102.04 from ¥102.10 in New York, and well down from the ¥102.28 earlier on Thursday in Asia.

High-yielding, riskier currencies also advanced, with the Australian dollar up 0.5% against the dollar, while the South Korean won added 0.4% and Indonesia's rupiah tacked on 0.3%.

There were also healthy gains for Malaysia's ringgit, and the Taiwan and Singapore dollars.

Also on traders' radar next week will be the Bank of Japan's (BoJ) own gathering, which traders will be keenly watching after reports that it is planning to cut interest rates further into negative territory.

The prospect of such a move has battered Japan's banks but analysts remain wary about whether officials will act, having baulked at unveiling any measures in the past.

"Coupled with the lack of confidence in the BoJ and with the Feds likely sitting tight due to political uncertainty regarding the US presidential election", the dollar is vulnerable against the yen, said OANDA senior trader Stephen Innes.

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