HONG KONG - Most Asian stocks jumped Thursday, leading world markets higher as oil prices bounced back and weak U.S. economic data fueled investor hopes that the Federal Reserve would slow the pace of rate hikes this year. However, Japanese shares fell as the yen rose against the dollar.
European shares were mixed around 8:10 a.m. Eastern. Britain's FTSE 100 percent rose 0.7 percent to 5,882, but Germany's DAX slipped 0.1 percent to 9,424. France's CAC 40 fell 0.3 percent to 4,215. U.S. stocks were poised to slide at the open. Dow futures fell 0.3 percent, and broader S&P 500 futures were down 0.4 percent.
Investors are dialing back expectations that the Fed will continue gradually raising interest rates after recent data showed the U.S. economy had a weak start to the year. On Wednesday, the private ISM survey found U.S. services companies grew in January at the slowest rate in nearly two years.
Meanwhile, the dollar sank after New York Fed President William Dudley told financial news agency MNI that the U.S. central bank would have to take into account tight global financial conditions when considering further rate hikes.
"A lot of the pressure in Asia has been taken off by the fact that yen strengthened so much overnight," which makes Chinese exports more competitive in Asia and reduces the need for Beijing to let China's yuan fall further, said Andrew Sullivan, sales trader at Haitong Securities.
"People are expecting the Fed to be on the back foot now" when it comes to rate hikes, he said. "There's a lot out there that suggest the Fed that isn't going to be as bullish as it might have been earlier."
Japan's Nikkei 225 lost 0.9 percent to close at 17,045 after the yen strengthened sharply against the dollar, hurting share prices of the country's export manufacturers. Other regional benchmarks notched solid gains, with South Korea's Kospi adding 1.4 percent to 1,916 and Hong Kong's Hang Seng advancing 1 percent to 19,183. The Shanghai Composite Index in mainland China climbed 1.5 percent to 2,791. Australia's S&P/ASX 200 rose 2.1 percent to 4,980. Markets in Southeast Asia also rose.
U.S. oil futures held most of Wednesday's sharp gains on the weaker greenback, which makes oil cheaper for international investors buying with other currencies. Benchmark U.S. crude shed 45 cents, or 1.3 percent, to $31.84 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $2.40, or 8 percent, to close at $32.28 a barrel on Wednesday in New York. Brent crude, a benchmark for international oil prices, dipped 12 cents to $34.92.
The dollar was fairly steady after losing about 1.7 percent overnight, dipping to 117.21 yen from 117.90 yen. The euro tested a new three-month high, rising to $1.1134 from 1.1118 in the previous day's trading.