On Sept 5, 2025 in Tokyo, Asian equities climbed after US markets hit fresh highs while Treasury yields eased to multi-month lows as investors priced in a likely Fed rate cut ahead of the US August non-farm payrolls report.
Key Takeaways
- Asian shares tracked Wall Street higher; S&P 500 closed at a record and major Asian indexes gained on Friday.
- Markets expect a quarter-point Federal Reserve cut at the Sept 17 meeting and about 60 basis points of easing this year, per LSEG data.
- Yields slid: 30-year Treasuries to 4.839% (three-week low), 10-year to 4.153% and 2-year to 3.582% (four-month lows).
- Japan’s 30-year JGB yield eased to 3.230% from a 3.255% peak; the US dollar index dipped to 98.128.
- Gold steadied near $3,558/oz after a recent record; Brent and WTI slipped to $66.88 and $63.32 a barrel respectively.
- Economists expect August non-farm payrolls to show about 75,000 new jobs, up slightly from July’s 73,000; weekly unemployment claims recently rose.
- OPEC+ delegates will meet this weekend to discuss possible October output changes, a development investors are watching.
Verified Facts
US equity sentiment remained supportive after the S&P 500 rose 0.8% on Thursday to close at a record high and the Nasdaq gained roughly 1%, with futures pointing higher on Friday (S&P futures up about 0.2%, Nasdaq futures up about 0.4%). Key Asian markets followed: Japan’s Nikkei rose 0.9%, Taiwan’s benchmark climbed 1.1%, Hong Kong’s Hang Seng added 0.8%, mainland China’s CSI300 advanced 1%, and Australia’s ASX gained 0.5%.
Fixed income moved decisively lower in yield as traders increased bets on imminent Fed easing. In Tokyo trading on Friday, the 30-year US Treasury yield touched 4.839% (a three-week low) while the 10-year and 2-year yields fell to 4.153% and 3.582% respectively, representing roughly four-month troughs. Japanese 30-year government bond yields retreated to 3.230% after peaking at 3.255% earlier in the week.
Market-implied odds show strong conviction for a 25 basis point cut at the Fed’s Sept 17 meeting and around 60 basis points of cumulative easing this year, according to LSEG analytics. Traders’ positions were reinforced by recent US data showing higher-than-expected initial unemployment claims and a slowdown in private payroll hiring in August, plus a dovish tone from Fed Chair Jerome Powell at the Jackson Hole symposium.
On the commodity front, gold stabilized near $3,558 per ounce after retreating from a record high of $3,578.50 reached on Wednesday, while Brent crude fell to $66.88 and WTI to $63.32 a barrel. Oil traders are monitoring an OPEC+ session this weekend, where several members and allies are reportedly discussing October production moves.
Context & Impact
Why yields matter: lower Treasury yields generally support higher equity valuations by reducing discount rates used in asset pricing and by easing borrowing costs for businesses. That dynamic has helped global stocks press higher this week.
Policy implications: a near-term Fed cut would mark a shift toward easier monetary settings, potentially supporting growth but also complicating inflation-readings and currency dynamics. The dollar’s modest retreat to a 98.128 index level reflects position adjustments ahead of the payrolls print.
Risks to watch: a surprisingly strong payrolls number could prompt a rapid repricing of rate-cut expectations, causing volatility across rates, equities and FX. Conversely, weaker-than-expected jobs data would likely cement the markets’ path toward easing and could lift risk assets further.
Official Statements
‘Unless it’s an absolutely stellar payrolls print, it’s hard to see too much that’s going to change the market away from locking in a September cut.’
Ken Crompton, National Australia Bank
‘Payrolls tonight are a sink-or-swim moment for the markets; the data will test whether the Fed is positioned to lower rates sustainably.’
Kyle Rodda, Capital.com
Unconfirmed
- Reports that eight OPEC members and allied producers will agree to specific October output increases are based on two sources and may change after formal talks.
- Market pricing for exact total Fed easing this year (60 basis points) reflects current trader bets and can shift sharply with incoming data or Fed guidance.
Bottom Line
As of Sept 5, 2025, markets are positioned for easier US policy, supporting equities and weighing on long-term yields; the US August payrolls print is the immediate catalyst that could validate or unsettle those positions. Investors should watch the jobs data and weekend OPEC+ talks for potential market-moving surprises.