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Asian shares higher after jobless data snaps Wall St rally

Shares advanced in Asia on Friday, with Tokyo's Nikkei 225 closing at its highest level since late February. Investors were awaiting more updates on the U.S. jobless situation Friday after unemployment data released overnight gave the S&P 500 its first loss in five days.

A report showed that the number of U.S. workers filing for unemployment benefits eased for a ninth straight week though the total number of people getting benefits rose slightly. A drop in that number the week before had raised hopes that some companies were rehiring workers as the economy gains momentum after pandemic fighting shutdowns.

In Asia, hopes for a swift recovery from the downturn brought on by the coronavirus crisis have spurred strong gains this week. The Nikkei 225 index in Japan gained 0.4% to 22,790.65 after opening lower.

The Hang Seng in Hong Kong surged 1% to 24,600.00 after authorities showed restraint as thousands of people defied a police ban to join a candlelight vigil Thursday marking the 31st anniversary of China’s crushing of a democracy movement in Beijing’s Tiananmen Square.

That appeared to have eased, at least temporarily, worries over recent efforts by Chinese leaders to exert more control over the former British colony. India's Sensex rose 0.6% to 34,181.11 and the Kospi in South Korea jumped 1.4% to 2,181.87. Australia's S&P/ASX 200 picked up 0.1% to 5,998.70.

Shares also rose in Taiwan and Southeast Asia. Regional airlines were strong gainers after American Airlines surged 41% Thursday, the biggest gain in the S&P 500. It announced it plans to fly 55% of its normal U.S. schedule next month, up from only 20% in April.

Japan Airlines Co. shares jumped nearly 10%. ANA Holdings Inc., Japan's other major carrier, surged 7% and Hong Kong's Cathay Pacific Airways climbed 6%. Markets also got some traction from hopes for more monetary and government stimulus as the European Central Bank announced a commitment to buying 600 billion euros ($680 billion) more of bonds, nearly doubling its asset purchasing program.

But the ECB also warned it expects the region’s economy to shrink 8.7% this year due to the pandemic. In the U.S., hopes are rising for up to $1 trillion in fresh stimulus in coming weeks. Most attention is focused on U.S. unemployment data coming later Friday, analysts said.

Surging share prices amid a raft of bad news, such as unrest in the U.S., growing antagonisms between Washington and Beijing and dismal economic indicators may be surprising but are “not illogical," Shane Oliver of AMP Capital said in a commentary.

Traders have already anticipated the worst and are seizing on positive news as economies reopen, flooded with cash from stimulus packages. So, “The rebound in share markets is also being confirmed by a rebound in other ‘risk on' growth assets, including commodities, the Australian dollar and credit markets," he said.

Overnight, the S&P 500 lost 0.3% to 3,112.35 after being on track earlier in the day for its longest winning streak since December. The Dow Jones Industrial Average rose less than 0.1%, to 26,281.82, and the Nasdaq composite fell 0.7% to 9,615.81.

A report showed that the number of U.S. workers filing for unemployment benefits eased for a ninth straight week, while the total number of people getting benefits rose slightly. It had fallen the week before, raising hopes that some companies were rehiring workers.

Share prices have climbed recently on optimism that the recession brought on by the coronavirus pandemic might end quickly as economies reopen from shutdowns and travel resumes. But many professional investors contend the recent rally, a nearly 40% climb for the S&P 500 since late March, is overdone and say a pullback is likely.

Economists expect the Labor Department's monthly jobs report for May to show employers slashed 8.5 million jobs last month, down from 20.5 million in April. That would push the unemployment rate to nearly 20% from about 15%.

The yield on the 10-year Treasury rose to 0.85% from 0.81% late Thursday after rising decisively during the day. It tends to move with investors’ expectations for inflation and the economy’s strength and was one of the first indicators warning of the coming economic devastation from the coronavirus outbreak.

In other trading, a barrel of U.S. crude oil for delivery in July rose 17 cents to $37.58 per barrel in electronic trading on the New York Mercantile Exchange. U.S. crude rose 12 cents to settle at $37.41 on Thursday.

Brent crude, the international standard, gained 31 cents to $40.30 per barrel. It rose 20 cents to settle at $39.99 per barrel on Thursday. The Russian news agency TASS, citing an anonymous source, reported Friday that the so-called OPEC+ nations would hold a meeting Saturday.

The meeting comes as Saudi Arabia and Russia appear to want ongoing oil cuts to continue to help boost the market amid weakened demand due to the pandemic. The dollar was trading at 109.33 Japanese yen, up from 109.15 yen late Thursday. The euro strengthened to $1.1369 from $1.1336.

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