Asian Stocks Climb as Emerging-Market Gains Offset Japan Losses

  • MSCI Emerging Market Index advances to one-month high
  • Chinese shares decline before this week’s data releases

Asian stocks rose as emerging markets rallied after a weaker U.S. employment report spurred speculation the Federal Reserve will delay raising interest rates, while Japan shares pared early declines.

The MSCI Asia Pacific Index added 0.3 percent to 130.11 as of 4 p.m. in Hong Kong, reversing a loss of as much as 0.5 percent. The 38,000-worker increase in non-farm payrolls was less than the most pessimistic of forecasts in a Bloomberg survey of economists, damping an unsteady recovery in global equities and sending the yen surging the most in more than a month on Friday. The probability of the Fed raising benchmark rates by July slid to 27 percent after the jobs data, from more than 50 percent a week ago.

“Should the Fed delay raising rates, we may very well see further outperformance from these emerging markets versus developed markets,” said Tim Schroeders, a Melbourne-based portfolio manager at Pengana Capital Ltd., who helps oversee about $1.2 billion in assets. “The yen strength isn’t going to help Japan. At the moment, whatever Japan is doing domestically in terms of policies is superseded by external machinations.”

The MSCI Emerging Markets Index climbed 1 percent, with equities in the Philippines, Indonesia and Malaysia pacing gains. The FTSE Bursa Malaysia KLCI index added 0.7 percent as the ringgit surged the most in two months.

“The weak U.S. jobs data gives emerging markets another day to live,” said Jonathan Ravelas, chief market strategist at BDO Unibank in Manila. “This could make investors more courageous to push markets higher.”

Newcrest, Wharf

Newcrest Mining Ltd. jumped 12 percent in Sydney, leading gains among gold producers as the price of the bullion jumped by most since February on Friday. Wharf Holdings Ltd. climbed 5.2 percent in Hong Kong, leading an advance among Hong Kong landlords as JPMorgan Chase & Co. said the negative impact of falling retail sales is starting to ease. Noble Group Ltd. sank 9.6 percent in Singapore after OCBC Securities ceased coverage of the commodities supplier.

Chinese stocks swung between gains and losses after posting their first weekly increase in almost two months as investors wait for a raft of economic data this week, including export and inflation figures. The Shanghai Composite Index slipped 0.2 percent, reversing an advance of as much as 0.3 percent. The mainland’s equity benchmark gauge jumped 4.2 percent last week amid speculation MSCI Inc. will include yuan-denominated shares in its global indexes this month.

Singapore’s Straits Times Index gained 0.8 percent, Hong Kong’s Hang Seng Index rose 0.4 percent and Australia’s S&P/ASX 200 Index climbed 0.8 percent. Taiwan’s Taiex index added 0.1 percent. Markets in South Korea and New Zealand were closed for holidays.

Japanese Exporters

Japan’s Topix index dropped 0.4 percent, paring losses of as much as 1.9 percent, as the yen weakened 0.6 percent to 107.19 a dollar in afternoon trading, after strengthening 2.2 percent on Friday. Japanese exporters slipped, with Honda Motor Co. and Nissan Motor Co. dropping at least 1.3 percent. Banks slumped, with Mitsubishi UFJ Financial Group Inc. retreating 1.5 percent.

Japanese stocks have been battered this year as a global equity rout that began at the start of 2016 sent the yen higher, while the Bank of Japan’s efforts to boost stimulus by implementing negative rates hurt bank shares. Prime Minister Shinzo Abe last week said the country will delay a planned sales tax increase, which had been scheduled for next April, on concern consumption isn’t strong enough to handle a higher levy. Attention will turn to the BOJ’s policy meeting next week for signs on whether the central bank will add to stimulus to reach its 2 percent inflation goal.

Futures on the S&P 500 Index rose 0.1 percent. The U.S. equity benchmark index slipped 0.3 percent on Friday after declining as much as 1 percent after the jobs report. The employment data come amid a high-stakes month for global markets, with anxiety over the U.K. potentially voting to exit the EU adding to concerns.

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