Stocks, bonds gain ahead of US data, Fed comments; yen rallies

Stocks, bonds, and the yen experienced gains on Thursday as Federal Reserve Governor Christopher Waller's comments indicated a willingness to remain patient on raising interest rates. Waller suggested that if upcoming data confirmed inflation pressures were cooling off, he would argue for keeping interest rates steady at the U.S. central bank's next policy meeting.

This led to a drop in bond yields, with the 10-year Treasury note falling 3.8 basis points to 4.756 per cent. The Japanese yen also surged by 2 per cent against the U.S. dollar, with traders betting on a Bank of Japan interest rate hike. Market expectations for a rate increase at the Fed's mid-September meeting fell to roughly 50 per cent, down from about 63 per cent in the previous session.

The U.S. economy showed a slow but stable jobs market, with the August employment report expected to show a gain of 56,000 jobs, holding the unemployment rate steady at 4.1 per cent. Despite the positive market sentiment, some stocks, like chipmaker Broadcom, experienced declines due to weaker-than-expected revenue forecasts. The yen's sharp rise fueled speculation of Japanese intervention, but analysts pointed to data showing no official action.

The Bank of Japan (BOJ) is now seen as potentially raising rates by 25 basis points this month, with some traders speculating about a larger increase in October.