Asian markets saw significant gains on Monday following a robust U.S. jobs report that lifted optimism about the economy, leading to a rally on Wall Street. Japan’s Nikkei 225 index notably rose by 1.9% to 39,354.63 after the yen weakened against the U.S. dollar. The currency fluctuated amidst speculation over the central bank’s interest rate plans following Prime Minister Shigeru Ishiba’s recent assumption of office.
In his policy speech, Ishiba emphasized the importance of salary increases outpacing inflation and outlined strategies to foster growth and distribution through investments. He also pledged support for low-income households, regional revitalization, and disaster resilience. However, he did not introduce major new initiatives, and his initial public approval ratings remain relatively low for a new leader in Japan.
Major Asian indices also saw gains, with Hong Kong’s Hang Seng index increasing by 1.4% and South Korea’s Kospi surging by 1.1%. Taiwan’s Taiex similarly gained 1.3%. Mainland Chinese markets are set to reopen after a weeklong holiday, with the government scheduled to announce details of economic stimulus plans.
Last week, the S&P 500 neared its all-time high, registering a 0.9% increase and closing at 5,751.07. The Dow and Nasdaq also posted gains. Notably, sectors such as banks, airlines, and cruise-ship operators performed well, buoyed by expectations of a stronger economy and increased consumer spending.
Despite positive market sentiment, concerns over Middle East tensions persist, particularly following an Iranian missile attack on Israel at the start of October. Oil prices fluctuated, with U.S. benchmark crude oil slipping to $74.19 per barrel. Treasury yields rose after the U.S. government reported an addition of 254,000 jobs in September, surpassing economists’ forecasts and indicating a robust job market.
Recent encouraging economic data have fostered hopes of sustained job market strength, particularly following the Federal Reserve’s decision to reduce interest rates. Traders are now adjusting predictions, with expectations of no further half-point interest rate cuts by the end of the year after a cut in September. In early trading, the euro saw a slight increase against the dollar.
