Asian stocks rose on Monday after a surprisingly strong U.S. jobs report boosted economic optimism and triggered gains on Wall Street.
US futures prices fell, and oil prices also fell.
Japan's Nikkei 225 index rose 1.9% to 39,354.63 as the yen weakened against the dollar. Since Prime Minister Shigeru Ishiba took office last week, Japan's currency has risen on speculation over the central bank’s interest rate plans.
In his policy speech on Friday, Ishiba said he hoped to see salary increases outpace inflation and promote investment to create a “virtuous cycle of growth and distribution.” He promised economic support for low-income households, regional revitalization, and disaster prevention measures.
However, according to Japanese media, he has not presented any major new initiatives, and his initial public approval rating was around 50% or less, relatively low for a new leader. He plans to dissolve parliament on Wednesday ahead of an October 27 election.
The yen sharply appreciated against the dollar before falling back late last week. The dollar was trading at 148.57 yen early Monday, down from 148.72 yen late Friday. When interest rates fall, the prices of stocks and other assets tend to rise.
Elsewhere in Asia, Hong Kong’s Hang Seng index rose 1.4% to 23,056.53 and Seoul’s Kospi index rose 1.1% to 2,597.34.
Taiwan’s Tyex rose 1.3%.
Mainland markets resumed on Tuesday after a week-long holiday, and the government said it planned to outline details of its stimulus package at a morning press conference in Beijing. Stock benchmarks have surged ahead of the October 1 National Day holiday on policy announcements aimed at boosting the sluggish real estate market, and could see more volatility this week.
In a research note, Mr. B of A Securities said, “In order to turn the economy around, we need further fiscal stimulus to stabilize the real estate market and restructure local government debt, as well as structural reforms to address excess production capacity and deflation.” “It’s necessary,” he said, noting that prices continue to decline. It affects home sales, home prices, and credit growth.
On Friday, the S&P 500 rose 0.9%, closing at 5,751.07, close to its all-time high set on Monday. The Dow rose 0.8% to $42,352.75, and the Nasdaq rose 1.2% to $18,137.85.
At the forefront are banks, airlines, cruise ship operators, and other businesses that stand to benefit most from a strengthened economy that puts people to work and pays bills. Norwegian Cruise Line rose 4.9%, JPMorgan Chase & Co. rose 3.5% and Russell 2000 index small companies rose 1.5%.
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Concerns over tensions in the Middle East remain looming, sending oil prices soaring as the world waits to see how Israel will respond to Iran’s Oct. 1 missile attack.
But benchmark U.S. crude oil fell 19 cents to $74.19 per barrel early Monday, while Brent crude, the international standard crude, fell 29 cents to $77.76 per barrel.
Treasury yields soared Friday after the U.S. government said employers added 254,000 more jobs than they cut last month. This accelerated from August’s pace of 159,000 jobs and was faster than economists expected.
Recent positive economic data has raised hopes that the job market will hold up even after the Federal Reserve pumps the brakes on the economy by raising interest rates to quell high inflation.
The Fed has started cutting interest rates, and Friday’s jobs report was so strong that traders now don’t expect another 0.5 percentage point cut before the end of the year after cutting rates in September. .
In other trading early Monday, the euro rose to $1.0973 from $1.0967.
