Rand, JSE and bonds rally on strong foreign exchange reserves and weaker dollar

South Africa’s rand, equities and government bonds advanced on Friday, lifted by stronger-than-expected foreign reserves data and further support from a weaker US dollar, which softened after US jobs numbers. By 14h11 GMT, the rand traded at R17.54 to the dollar, up about 1.30% from its previous close and trimming recent losses. This marked a reversal from Thursday, when the rand weighed down partly by a stronger dollar that dampened the appeal of most emerging-market currencies.

On the Johannesburg Stock Exchange, the Top 40 index gained 1.80%, while the yield on South Africa’s 2035 government bond eased by 8 basis points to 9.565%, reflecting stronger bond prices.

In the US equities edged lower on Friday as concerns mounted over a cooling labour market. The S&P 500 and Dow Jones each fell around 0.70%, while the Nasdaq 100 slipped about 0.30%, cushioned slightly by mixed performances in the tech sector. August’s private sector added only 22 000 jobs – far below the 75 000 expected – while the unemployment rate climbed to 4.30%, its highest since 2021. The weaker data bolstered expectations of Federal Reserve rate cuts, with markets now pricing in roughly 65 basis points of easing before year-end.

London’s FTSE 100 edged lower on Friday, closing at 9 208.21 and ending a three-day rally, as investors reacted to a weaker-than-expected US jobs report and renewed concerns about global growth. European markets also slipped, with the STOXX 600 easing by around 0.20%, as sentiment across the region turned more cautious.

Asian markets were more upbeat as Japanese equities advanced, with the Nikkei 225 climbing 1.03% to 43 019 and the Topix up 0.82% at 3 105. Gains were supported by US President Donald Trump’s executive order to cut tariffs on Japanese cars, alongside news of a major $550 billion Japanese investment in US projects. 

Chinese markets also rebounded strongly after the prior session’s sell-off, as bargain hunters moved in. The Shanghai Composite rose 1.24% to 3 813, while the Shenzhen Component jumped 3.89% to 12 591. Earlier concerns over regulatory changes, including eased short-selling rules, appeared to fade, helping to restore market confidence.

In commodities, WTI crude oil fell to around $62 per barrel, extending the recent decline amid ample supply and softer demand. Meanwhile, gold surged over 1% to a fresh record high of $3 595 per ounce, bolstered by expectations of Fed rate cuts and growing demand for safe-haven assets.