The euro remained under pressure after a downbeat eurozone inflation report, while the yen firmed slightly in early Asian trading after the Bank of Japan's Tankan corporate sentiment survey contained both positive and worrying signs. Confidence in big Japanese manufacturers worsened, leading some to bet that the central bank could take further stimulus steps. However, service-sector sentiment improved for the fourth straight quarter to hit the highest level in more than two decades, the closely watched central bank survey showed.
The U.S. Federal Reserve opted to refrain from raising interest rates for the first time since 2006 at its meeting last month, citing worries about the global economy, particularly China. However, an improving U.S. employment situation could prompt the central bank to hike rates as early as this month. Economists expect Friday's U.S. nonfarm payrolls report to show that employers added 203,000 jobs in September, according to a Reuters poll.
Embattled Asian risk markets are likely to regain more ground this morning following a constructive overnight session in Europe and the U.S., although today's Hong Kong holiday is bound to contain regional activity. Wall Street ended its worst quarter in four years on a positive note as bargain hunters went to work to send the Dow Jones and S&P 500 1.47% and 1.91% higher, respectively by the close of business on Wednesday. U.S. data was mixed, with the September ADP employment report posting a larger-than-expected net 200,000 increase in private employment (194,000 was forecast) while the Chicago September PMI came in well below the 53.0 consensus at 48.7 - its worst reading since May.