Asian stocks set to gain on U.S. data; yuan in focus

HONG KONG, Jan 9 (Reuters) – Asian stocks are poised to rise on Monday and the dollar firmed against a basket of currencies after the latest payrolls data highlighted U.S. jobs and wages growth.

Financial markets will be carefully tuned to President-elect Donald Trump’s news conference on Wednesday with his views on global trade and China under close scrutiny, although investors would be wary of chasing any big market moves higher.

MSCI’s ex-Japan Asia-Pacific shares index was broadly flat, holding near one-month highs. Australia’s S&P/ASX200 rose 0.5 percent. Japan is closed for a holiday.

U.S. stocks ended at record highs fuelled by optimism about Trump’s plans to stimulate the economy with lower taxes and infrastructure spending. Both the Nasdaq and the S&P 500 ended at record highs.

In currencies, the dollar started the week on a firm note after Friday’s data showed a rebound in U.S. wages pointing to sustained labour market momentum and more rate increases from the U.S. Federal Reserve.

"With expectations of more rate hikes on the horizon, we believe the dollar will resume its upward trend versus emerging market Asia currencies in the coming weeks," Gao Qi, an FX strategist at ScotiaBank in Singapore wrote in a client note.

The dollar was trading at 117.14 yen, nearly 2 percent above the Friday’s lows of around 115. It was steady at 102.23 against a basket of currencies

China’s yuan will be under particular scrutiny after weekend data showed foreign exchange reserves declined to near six-year lows as authorities stepped up their intervention to protect the currency.

Bonds were stung by the strong U.S. data with both two-year and 10-year U.S. Treasury yields inching higher as market participants pondered the probability of more rate hikes in 2017.

The yield on two-year U.S. Treasury notes was perched at 1.21 percent versus Thursday’s low of 1.17 percent.

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Oil prices edged lower thanks to a stronger dollar and growing concerns over whether OPEC producers would stick to an agreement to cut output. Brent crude futures were down 0.2 percent in early trade

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