Asia-Pacific markets traded higher on Friday, tracking gains on Wall Street after new labor market data boosted investor confidence in the U.S. economy and eased recession concerns following a sharp market sell-off earlier in the week.

Futures for Australia’s S&P/ASX 200 rose 0.72%. Japan’s Nikkei 225 added 1.63%, while the broad-based Topix traded 1.43% higher. South Korea’s Kospi inched 1.43% higher, while the small-cap Kosdaq jumped 2.67%.

Hong Kong Hang Seng index rose 1.78% in its first hour of trade. Mainland China’s CSI 300 inched up 0.46%.

Earlier this week, global equities and currencies plunged after U.S. employment data renewed recession fears and investors started to unwind their yen “carry trades.”

Investors are parsing China’s consumer price index and producer price index for July.

China’s consumer price index climbed 0.5% year-on-year, beating Reuters’ estimates of a 0.3% rise. The figure compares to a 0.2% climb in June.

The producer price index for July fell by 0.8% from a year ago. That was slightly less than the 0.9% forecast decline, and unchanged from June’s 0.8% drop.

Overnight in the U.S., the S&P 500 advanced 2.3%, closing at 5,319.31 and posting its best day since November 2022. The Dow Jones Industrial Average surged 683.04 points, or 1.76%, to 39,446.49. The Nasdaq Composite added 2.87%, ending at 16,660.02.

Initial filings for unemployment insurance totaled less than anticipated last week, countering other indications of a weakening labor market. First-time filings for jobless benefits came in at 233,000 last week, down 17,000 from the previous week and lower than the Dow Jones estimate for 240,000, the Labor Department reported Thursday, offering markets some relief amid signs that job growth is slowing.

—CNBC’s Hakyung Kim and Jesse Pound contributed to this report.