The yen strengthened against the dollar for a fourth straight day after new data supported expectations for Federal Reserve policy, while a fall in U.S. Treasury yields extended gains in emerging market currencies into Asia. European stock futures edged higher after largely range-bound trading in Asian trading. Shares in export-oriented Japanese economy fell as the yen strengthened to around 141 per dollar. Australian and Hong Kong stock benchmarks rose after Wall Street rose for a fourth straight day. #美降息25个基点预期升温 #上涨

The policy-sensitive two-year U.S. Treasury yield fell 6 basis points in Asian trading as emerging Asian currencies including the Korean won extended gains in Latin American currencies, weighing on the dollar.

Stocks were mixed and bonds were stronger, suggesting investors remain divided over how deep the Federal Reserve will cut interest rates next week. Data on Thursday showed U.S. producer prices rose slightly in August after being revised down from the previous month. Meanwhile, a rise in applications for unemployment benefits revived concerns about a weakening labor market.

"The market was slow to re-price yesterday's dovish FOMC rate cut after the U.S. PPI data left room for a 50bp cut next week," said Carol Kong, FX strategist at Commonwealth Bank of Australia. "While we still think a 25bp cut is more likely, the possibility of a 50bp cut will weigh on the dollar in the interim."

In Japan, just over half of central bank watchers polled by Bloomberg believe the next rate hike will be in December, while none expect a policy move when the central bank meets next week. In the past four weeks, five of the nine board members have said they intend to raise rates again if the Bank of Japan’s inflation forecasts come true. Market volatility in the days after the Bank of Japan’s July 31 rate hike did not panic policymakers.

"The probability of a rate hike at this meeting is extremely low," said Masamichi Adachi, chief Japan economist at UBS Securities. "It is too early to judge the impact of the July rate hike and the market crash." Still, some hedge funds are increasing bullish bets on the yen in the options market as they expect the yen to extend its gains, having become the world's best-performing currency this quarter.

In China, the CSI 300 index gave up early gains to turn flat, falling to its lowest level since January 2019 on Thursday. Even as President Xi Jinping called on officials to meet China's annual growth target of around 5%, China's government bond market continued to rally strongly, pushing the 10-year bond yield to its highest level since official records began in 2002.

In corporate news, Chinese home appliance giant Midea Group Co Ltd raised $4 billion in its Hong Kong IPO at the top end of its range, showing demand for the city's largest stock offering in more than three years.

U.S. West Texas Intermediate crude futures edged higher on Thursday after rising more than 2% as Storm Francine disrupted production in the Gulf of Mexico. Gold prices hit a new high, partly due to a decline in the dollar.