Asian markets rallied on Monday, buoyed by a surprisingly strong U.S. jobs report that sparked optimism about economic conditions, driving gains on Wall Street.
Despite this positive sentiment, U.S. futures experienced a slight decline, and oil prices fell. Japan’s Nikkei 225 index surged by 1.8%, reaching 39,332.74, as the yen weakened against the U.S. dollar. Speculation regarding the central bank’s interest rate plans has heightened following activities surrounding newly appointed Prime Minister Shigeru Ishiba, with expectations of no imminent rate hikes.
In the wake of increased interest, Nintendo’s shares rose by 5% amid news of a Saudi wealth fund’s intentions to scale up its investments in the iconic video game maker.
In his recent policy address, Ishiba emphasized his commitment to fostering salary increases that surpass inflation, promoting investment for sustained economic growth, and providing support for low-income households. He also proposed initiatives for regional revitalization and disaster resilience but introduced no significant new policies. Public support for Ishiba, however, remains relatively low, with initial ratings hovering around 50%. He is scheduled to dissolve parliament on Wednesday ahead of elections on October 27.
Throughout last week, after a brief rise against the dollar, the yen fell again. As of early Monday, the dollar was trading at 148.45 yen, down from 148.72 on Friday.
In broader Asian markets, Hong Kong’s Hang Seng index gained 1.1%, reaching 22,977.97, while the Kospi in Seoul experienced a surge of 1.3% to 2,602.23. Taiwan’s Taiex also saw an increase of 1.8%.
Mainland Chinese markets are set to reopen on Tuesday following a weeklong holiday, with the government planning to present details on economic stimulus efforts during a morning press conference in Beijing. Prior to the October 1 National Day holiday, announcements aimed at revitalizing the struggling property market had led to significant gains in share benchmarks, signaling potential volatility in the coming week.
Analysts highlight the necessity for increased fiscal stimulus to stabilize the property market and address ongoing economic challenges, including declining home sales and credit growth.
Last Friday, the S&P 500 index climbed by 0.9%, nearing an all-time high with a close of 5,751.07. The Dow Jones Industrial Average gained 0.8% to finish at 42,352.75, while the Nasdaq rose by 1.2% to 18,137.85. Key sectors driving this growth included banks, airlines, and cruise-ship operators, all of which stand to benefit from a strengthening economy.
Despite ongoing Middle East tensions influencing oil prices, U.S. benchmark crude oil prices dipped by 19 cents to $74.19 per barrel, while Brent crude lost 29 cents to settle at $77.76 per barrel.
Following the release of robust employment data last Friday, Treasury yields surged as the U.S. economy added 254,000 jobs last month, a significant increase from August’s figures and surpassing economists’ expectations. This encouraging employment news has sparked optimism around the job market’s resilience, even as the Federal Reserve moderates its approach with interest rate adjustments.
In other early Monday trading, the euro remained stable at $1.0967.
