Most Asian markets up ahead of US jobs but Fed taper talk builds

Unemployment among the youth is at an all-time high. AFP/Frederic J. Brown

HONG KONG - Most Asian markets rose on Thursday, with focus on the upcoming release of key US jobs data, while traders were also trying to gauge when the Federal Reserve will begin reconsidering its ultra-loose monetary policies in light of a robust economic recovery.

Oil prices also extended gains, fuelled by growing optimism that the reopenings and coronavirus vaccine rollouts will lead to a surge in activity over the coming months and ramp up demand.

Friday's non-farm US payroll figures will provide the most recent snapshot of the world's top economy, with expectations for a big jump as businesses restart and people return to some semblance of normality.

However, observers pointed out that the recovery in the jobs market is not as smooth as hoped as some choose not to return to work yet owing to a number of issues including lingering virus fears and the handouts in President Joe Biden's stimulus earlier this year.

And they added that increased demand for labour is adding to upward pressure on inflation -- as wages rise and some companies offer cash incentives -- which is already being fired along by supply shortages and high energy costs.

This in turn is causing a headache for the Fed, which has pledged to keep its accommodative monetary policy in place for the foreseeable future but also has to make sure price spikes do not get out of control.

The ultra-loose policies, including record-low interest rates, have been a key driver of a surge in equities from their nadir in April 2020.

The central bank's Beige Book summary of the economy, released Wednesday, highlighted those issues.

Vaccinations had contributed to the "somewhat faster rate" of recovery in recent weeks, it said, but "significant supply chain challenges continued to disrupt production".

Employers were having trouble filling posts, which "prevented some firms from increasing output" and in a few cases forced cuts in hours of operation, before warning "looking forward, contacts anticipate facing cost increases and charging higher prices in coming months".


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