Tokyo (Business Emerge) October 7: Asian stocks experienced a notable surge on Monday, buoyed by strong US labor market data that eased concerns of an impending recession and led to a shift away from expectations of rate cuts. The dollar reached a fresh seven-week high against the yen, while US Treasury yields climbed to their highest level in two months after Friday’s non-farm payrolls report showed unexpected strength in job additions, marking the most significant increase in six months.
Despite heightened tensions in the Middle East, with Israel targeting locations in Lebanon and Gaza on the one-year anniversary of the Hamas attack, crude oil prices eased from a one-month peak. Japan’s Nikkei index led the regional equity rally, climbing 2.28% as of 0515 GMT, driven by the yen’s relative weakness. The Hang Seng in Hong Kong gained 1.45%, Australia’s ASX 200 rose 0.68%, and South Korea’s Kospi added 1.53%. Meanwhile, the stock markets in Mainland China remained closed for the Golden Week holiday, resuming operations on Tuesday.
MSCI’s broad Asia-Pacific index added over 1%, showing the market’s positive sentiment. On the other hand, US Dow futures saw a slight decline after the cash index closed at an all-time high on Friday following the jobs report.
“The market’s response underscores the current focus on economic growth and its potential effects on future corporate earnings,” commented Kyle Rodda, senior financial market analyst at Capital.com. “Additionally, there appears to be a resurgence in the notion of US economic exceptionalism.”
The dollar advanced as far as 149.10 yen, reaching levels not seen since August 16, before pulling back to 148.49 yen. Gains were tempered following remarks from Japan’s top currency official, Atsushi Mimura, who stated that authorities were closely observing currency fluctuations, particularly speculative moves, with urgency. The euro also declined 0.08% to $1.0966, approaching last week’s seven-week low of $1.09515.