Asian stocks at record high, US jobs data buoys yields, dollar

Published Thu, Feb 12, 2026 · 11:23 AM

[SINGAPORE] Asian stocks rose to a record high on Thursday (Feb 12), while the US dollar firmed a touch against most currencies except the yen after stronger-than-expected US jobs data dented near-term rate cut expectations, setting the stage for the inflation report on Friday.

Stocks in South Korea and Japan hit record highs in early trading, lifted by the technology sector. Japanese shares have been on a tear since Prime Minister Sanae Takaichi’s resounding election victory over the weekend on a campaign of increased economic stimulus.

That has pushed MSCI’s broadest index of Asia-Pacific shares to another all-time peak. The index was 0.65 per cent higher, taking its gains in the first six weeks of the year to about 13 per cent.

Market focus this week is on a slew of US economic reports with the data on Wednesday showing job growth unexpectedly accelerated in January while the unemployment rate eased a touch in signs of labour market stability that could encourage the Federal Reserve to leave rates unchanged in the near term.

Thomas Mathews, head of markets for Asia-Pacific at Capital Economics, said the big picture is that labour market conditions may be tightening at this point. “If so, investors may be overestimating the case for further easing, and Treasuries could be in for a bit more pain.”

Market expectations for a Fed cut of at least 25 basis points at the central bank’s March meeting had risen to about 20 per cent before the jobs data, but retreated after the jobs report and were last at about 5 per cent, according to CME’s FedWatch Tool. Traders are still pricing at least two rate cuts this year.

The two-year US Treasury yield , which typically moves in step with interest rate expectations for the Fed, was at 3.512 per cent in Asian hours after jumping 5.8 basis points in the previous session, its biggest one-day gain since late October. The yield on the benchmark US 10-year Treasury note was at 4.186 per cent.

The elevated yields helped support the under-pressure US dollar, which rebounded a bit against most currencies. Analysts, though, point out that uncertainties on Fed independence and policy risks suggest that the US dollar will need more such positive surprises in data to sustain the rebound.

“Improving global growth prospects and the continued outperformance of non-US equities keep the case for USD weakness,” OCBC strategists said in a note.

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Inflation data is due on Friday and will be the next test for market views on interest rate cuts.

The yen was an outlier amid US dollar strength as it firmed again and last fetched 153.02 per US dollar. The currency has surged nearly 3 per cent since Takaichi’s win as investors suspect the big mandate could lead the government to be fiscally responsible as it eliminates the need for negotiations with opposition parties.

“Yen shorts are collectively reassessing positions, although at this stage the bearish trend in JPY that started in early 2025 looks more like a reversion to the mean than the start of a structural bull market,” said Chris Weston, head of research at Pepperstone.

“That said, traders need to stay open-minded as the macro picture evolves and where the market decides where it ultimately wants to take JPY.”

In commodities, oil prices extended their gains as investors worried about escalating tensions between Iran and the US Brent crude oil futures were 0.4 per cent higher at US$69.68 a barrel. US West Texas Intermediate crude rose 0.46 per cent to US$64.93 per barrel.

Spot gold was down 0.44 per cent at US$5,058.49 after rising over 1 per cent in the previous session. REUTERS