- Japanese shares advance as yen weakens after employment report
- Honda, Kubota advance in Tokyo while energy shares drop
Asian stocks rose after a U.S. employment report boosted optimism in the world’s largest economy, with Japanese shares climbing as a weaker yen sent exporters higher.
The MSCI Asia Pacific Index advanced 0.2 percent to 123.29 as of 4:01 p.m. in Hong Kong. The Standard & Poor’s 500 Index rose the most in almost three months on Friday, while the yen weakened 0.4 percent against the dollar after the bigger-than-expected increase in American nonfarm payrolls. Japan’s Topix index added 0.7 percent on Monday. The data supports the case for the Federal Reserve lifting interest rates next week, according to Shane Oliver, head of investment strategy in Sydney at AMP Capital Investors Ltd., which oversees about $115 billion.
“Providing the Fed undertakes a dovish hike as we expect, in stressing that future moves will be gradual, then confidence is likely to return,” he said. “The Fed is unlikely to do anything to threaten global growth.”
South Korea’s Kospi index lost 0.5 percent and Singapore’s Straits Times Index added 1 percent. Australia’s S&P/ASX 200 Index gained 0.1 percent and Taiwan’s Taiex Index advanced 0.7 percent. New Zealand’s S&P/NZX 50 Index slipped 0.5 percent. Volumes in all major markets were down on Monday, with 20 percent fewer shares than the 30-day average changing hands on the Topix.
The weaker yen boosted Japanese exporters. Honda Motor Co. rose 1.3 percent, while Kubota, which gets about two-thirds of machinery revenue abroad, added 1.9 percent.
Friday’s report showed a 211,000 increase in November U.S. payrolls, following a 298,000 gain a month earlier that was bigger than previously estimated. The jobless rate held at 5 percent, a more than seven-year low. A healthy rate of hiring has raised the odds that Fed officials will boost rates this month for the first time since 2006. The pace of future increases is contingent on progress toward the central bank’s inflation goal and probably depends on how quickly wage pressures mount as the job market tightens.
Meanwhile, European Central Bank chief Mario Draghi tried to soothe investors disappointed by his move on economic support last week, signaling on Friday that the bank will add stimulus as needed.
Futures on the S&P 500 slid 0.2 percent. The underlying equity measure jumped 2.1 percent on Friday, its strongest gain since Sept. 8, with the gauge posting its ninth weekly advance in the last 10. A measure of volatility plunged the most in two years.
Hong Kong’s Hang Seng Index lost 0.2 percent. The Shanghai Composite Index rose 0.3 percent as health-care, technology and consumer-discretionary companies rallied, outweighing declines for brokerages after Citic Securities Co. said it has been unable to contact two executives.
China will cut trading hours for stock-index futures contracts after a government campaign to prevent bearish wagers sparked a record collapse in volumes. China will also start a stock-market circuit breaker. A move of 5 percent in the CSI 300 Index would trigger a 15-minute halt for stocks, options and index futures, while a swing of 7 percent would stop trading for the remainder of the day, the Shanghai Stock Exchange said in a statement on Friday.
Energy shares led losses in Asia on Monday as oil traded below $40 a barrel after OPEC tossed aside the idea of limiting production to control prices at a meeting in Vienna on Friday. The Organization of Petroleum Exporting Countries said it will keep pumping as much as it does now -- about 31.5 million barrels a day -- effectively endorsing limitless output. Cnooc Ltd. sank 4.9 percent in Hong Kong and Woodside Petroleum Ltd. declined 3.8 percent in Sydney.