(Bloomberg) -- Asian equities were set to climb early Friday even as traders scaled back expectations for a Federal Reserve rate cut next month which weighed on US stocks and strengthened the dollar.

Australian shares edged higher while Japanese and Hong Kong equity futures rose. Contracts for Tokyo benchmarks were supported by further weakness in the yen as an index of greenback strength advanced for a fifth session on Thursday. US equity futures were slightly lower in early Asian trading.

The action was driven by further signs of resilience in the US economy and comments from Fed Chair Jerome Powell that the central bank will be in no rush to cut interest rates. Powell’s comments appear in line with some of his other colleagues who are advocating a go-slow approach to future rate reductions.

US two-year yields, which are more sensitive to monetary policy, spiked after the remarks and traders dialed back bets on a December rate reduction to below 60% — from 80% in the previous day. Australian and New Zealand yields climbed early Friday.

“Powell’s speech was hawkish,” said Neil Dutta at Renaissance Macro Research. “I think they will still cut in December since policy remains restrictive and they want to get to a neutral setting. That said, on the economy, I think Powell (and the broader consensus) is complacent. There is more downside risk in the near-term than is being appreciated.”

In Asia, the yen was steady Friday after weakening past 156 per dollar on Thursday, rekindling speculation over the potential for officials to step into support the currency. Emerging market currencies extended losses.

Investors will also be looking for any market reaction to Chinese retail and industrial production data due Friday in the wake of stimulus measures announced by Beijing in the past few weeks.

Elsewhere, data set for release in the region includes gross-domestic product for Japan, Malaysia and Hong Kong, while trade numbers in Indonesia are expected. Markets are closed in India.

In commodities, copper headed for a seventh consecutive weekly fall, partly driven by concerns over demand from China. Oil steadied on Friday after advancing in the prior session, while gold was little changed.

Resilient Economy

Data earlier Thursday in the US showed producer prices exceeded consensus forecasts. Jobless claims were below expectations and touched the lowest level since May. Short-dated US government debt sold off, pushing the policy-sensitive two-year yield six basis points higher Thursday, largely reserving its move from the prior day.