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Nikkei leads Asia higher as yen slips; commodities on a roll By Reuters

Freight Technologies Wins Samsung Mexico SDS Business, Shares Soar

By Wayne Cole

SYDNEY (Reuters) -Asian shares rallied on Thursday as U.S. rate cuts remained on the menu, even if their timing was unclear, while the yen slid against everything except the dollar and boosted Japanese stocks.

There was also action in commodities as gold reached another record, oil a five-month peak and a 13-month top, helping to lift shares in basic materials and energy companies.

Some of these gains were due to supply disruptions and geopolitical tensions, but they also reflect optimism about global growth given a recovery in recent factory surveys (PMI), particularly for China.

“Steady improvement in manufacturing surveys throughout last quarter point to momentum improving broadly in the coming months,” wrote analysts at JPMorgan in a note.

“The global manufacturing output PMI moved further into expansionary territory in March, reflecting largely positive results across the major economies,” they added. “Global business confidence is on the mend.”

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.4%, though a holiday in China made for thinner trading conditions.

Tokyo’s bounced 1.6% as the yen fell, with the materials, industrials, and energy sectors leading the way.

EUROSTOXX 50 futures and both edged up 0.1%. rose 0.3% and Nasdaq futures 0.4%.

Sentiment was aided by a reaffirmation from Federal Reserve Chair Jerome Powell that U.S. rates were still on course to be cut this year, though the timing was data dependent.

The case for easing was underpinned by a survey of the U.S. services sector that showed its index of prices paid fell to the lowest since March 2020, offsetting a worrying rise in the survey of manufacturing released early this week.

That also outweighed a surprisingly strong ADP report, which showed private sector jobs rose 184,000.

While this series has a patchy correlation to the official payrolls report due on Friday, it was strong enough for Goldman Sachs to revise up its forecast for payrolls by 25,000 to a solid 240,000.

Such an outcome would top the median forecast of 200,000 and could lead markets to again pare the chance of a June rate cut.

PRICING FEWER CUTS

Fed fund futures have already lowered the chance of a June move to 62% from 74% a month ago.

Yet the bigger shift has been in how fast and far rates are expected to fall, with roughly 73 basis points priced in for this year compared to more than 140 basis points in January.

Investors have also taken 100 basis points of easing out of…

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