MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.3% following two consecutive days of declines

Stocks rose during the Asian trading session on Friday after activity gauges pointed to an economic expansion during June.

After a shaky start, MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.3% following two consecutive days of declines.

Kospi ​swung between gains and losses, and was last up 3% as buyers pounced on chipmaker stocks. Nikkei 225 reversed early losses to trade 0.7% ⁠higher.

Purchasing Managers’ Index (PMI) data released on Friday indicated increased activity.

Japan’s services sector returned to expansion in June ​after stalling the previous month, while China’s services activity expanded at a slightly slower pace but overseas demand rose at the ​fastest rate in 20 months.

Elsewhere, U.S. job growth slowed sharply in June and payroll gains for the prior two months were revised lower, according to data released on Thursday, pointing to a cooling labour market. The unemployment rate dropped to 4.2% last month from 4.3% ​in May as workers left the labour force, pushing the participation rate to the lowest level in more than five ​years.

The figures challenged the narrative that the Fed remains on track to hike in the second half of this year, Westpac analysts ‌wrote in ⁠a research report.

The tepid jobs data doused traders’ expectations of an imminent rate hike and raised the odds that the central bank will keep rates on hold until October.

Fed funds futures are pricing an implied 46.8% probability that the U.S. central bank will keep rates steady at its meeting on September 15 to 16, compared to a 35.8% chance a day earlier, ​according to the CME Group’s FedWatch ​tool.