By Kevin Buckland
TOKYO Most Asia-Pacific stock markets rose on Thursday amid receding bets for a U.S. rate hike this month and relief over the passage through the U.S. House of Representatives of a bill to suspend the federal debt ceiling.
A surprise swing to growth for Chinese factory activity also provided in lift to sentiment, in a rare recent positive sign for the country's post-pandemic recovery. Crude oil prices clawed back from four-week lows.
The dollar dipped to a one-week low versus the yen and hung close to Wednesday's more-than-two-month trough to the euro after Federal Reserve officials including governor and vice chair nominee Philip Jefferson pointed to a rate hike "skip" at the June 13-14 policy meeting. Treasury yields edged up from nearly two-week nadirs.
MSCI's broadest index of Asia-Pacific shares gained 0.82%, rebounding after touching the lowest level since March 22 in the previous session.
Japan's Nikkei added 0.77%, while Hong Kong's Hang Seng gained 1.07% and mainland Chinese blue chips advanced 0.71%.
U.S. S&P 500 e-Mini futures were 0.12% higher.
A divided House passed a bill to suspend the $31.4 trillion debt ceiling - and avert a catastrophic default - with majority support from both Democrats and Republicans, stoking optimism that it can move through the Senate before the weekend.
"This has gone through with a very big majority, so there's enough bipartisan support that it's very hard to believe this isn't going to be even more of a formality in the Senate," said Ray Attrill, head of foreign-exchange strategy at National Australia Bank.
"What this does is it turns the attention to the incoming data and the Fed meeting this month," Attrill added.
Money markets currently lay about 38% odds for a hike from the Fed on June 14, swinging back from about 70% earlier in the day, after some unexpectedly hot jobs numbers.
However, shortly after, the Fed's Jefferson said skipping a rate hike in two weeks would provide policymakers time to see more data before making a decision. Philadelphia Fed President Patrick Harker also said on Wednesday that for now he is inclined to support a "skip" in rate hikes.
More closely watched employment data is due this week, with the ADP survey out later in the data, followed by the monthly non-farm payrolls report on Friday.
"It's been a fairly strong retracement in terms of the market's expectations for the June meeting, and it's come contrary to the data," said Tony Sycamore, a market analyst at IG Markets.
"I suspect they would like to go on hold, but I'm not convinced," he said. "I think the odds are closer to 50/50."
The dollar slipped to the lowest since May 25 at 138.96 yen early in the Asian session, but rebounded to by 0.24% stronget at 139.655 approaching the European morning.
The euro eased 0.08% to $1.06785, moving back toward Wednesday's low at $1.0635, a level last see on March 20.
Benchmark 10-year U.S. Treasury yields edged up to 3.6733% in Tokyo, after dipping to 3.6140% overnight for the first time since May 18.
Brent crude futures for August delivery rose 35 cents, or 0.48% to $72.95 a barrel, while U.S. West Texas Intermediate crude (WTI) added 27 cents, or 0.4%, to $68.36 a barrel.
(Reporting by Kevin Buckland; Editing by Simon Cameron-Moore and Lincoln Feast.)
