(Bloomberg) — Stocks in Asia rose Thursday after US shares touched a fresh peak as economic data supported the case for Federal Reserve rate cuts.

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A gauge for equities in the region gained for a fifth straight session as Japan’s Topix hit a record intraday high and shares in South Korea and Australia advanced. The S&P rose 0.5% and the Nasdaq climbed 0.9% to both set new highs Wednesday in a shortened session ahead of a US holiday. Contracts for US equities were steady in early Asian trading.

The moves were helped along by data that showed the services sector contracted at the fastest pace in four years while the labor market saw further signs of softening.

In Asia, the yen strengthened Thursday after setting a fresh low since 1986 against the greenback in the previous session as speculation persists that the Bank of Japan will tighten policy only gradually.

Minutes from the Fed’s June policy meeting showed officials were awaiting evidence that inflation is cooling and were divided on how long to keep rates elevated. Swap traders projected almost two rate cuts in 2024, with the first in November — though bets on a September reduction increased.

“Bad news is good news,” said Fawad Razaqzada at City Index and Forex.com. “That’s how risk assets reacted in the aftermath of today’s US data releases.”

Australian and New Zealand yields fell early Thursday after Treasury 10-year yields dropped seven basis points to 4.36%, weighing on an index of dollar strength.

Elsewhere in Asia, Chinese electric-car brands held on to their share of the slumping European EV market in May. Automakers like BYD Co. made up 8.7% of total EV sales, roughly on par with a year ago, as Chinese firms pressure European counterparts with new, inexpensive models.

Meanwhile, Britons prepared to head to the polls in a general election Thursday. The pound was little changed in early Asian trading.

Jobs Report

Investors will now keep an close eye on Friday’s US jobs report. Economists anticipate a 190,000 gain in June nonfarm payrolls — less than the previous month — with the unemployment rate holding at 4%.

“Given other evidence of a cooling economic backdrop, the payroll report could be increasingly decisive for the Fed as it seeks a rationale to signal an easing of rates,” said Quincy Krosby at LPL Financial.

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Chicago Fed President Austan Goolsbee said there’s still a lot of data the US central bank needs to see before gaining the confidence to cut interest rates.

“Until employment weakens significantly there remains a fundamental support for the US economy, though there is some evidence of slowing,” said Don Rissmiller at Strategas. “Fed members have indicated they want to see more progress on inflation – fortunately the US economy still looks robust enough currently to take an extended rate pause. But the clock is ticking.”

In commodities, gold was steady after a Wednesday gain. Crude oil held near a two-month high after a government report showed US crude inventories shrinking by the most in almost a year.

Key events this week:

• UK general election, Thursday

• US Independence Day holiday, Thursday

• Eurozone retail sales, Friday

• US jobs report, Friday

• Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 9:46 a.m. Tokyo time

• Hang Seng futures rose 0.9%

• Nikkei 225 futures (OSE) rose 0.5%

• Japan’s Topix rose 0.6%

• Australia’s S&P/ASX 200 rose 1.1%

• Euro Stoxx 50 futures were little changed

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0791

• The Japanese yen was little changed at 161.55 per dollar

• The offshore yuan was little changed at 7.3017 per dollar

Cryptocurrencies

• Bitcoin rose 1.4% to $60,350.19

• Ether rose 1.6% to $3,307.15

Bonds

Commodities

This story was produced with the assistance of Bloomberg Automation.

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