Asian Stocks Advance to One-Year High After U.S. Payrolls Data

Is the Japanese Stock Recovery in Danger of Stalling?
  • Nonfarm jobs growth exceeds all estimates in Bloomberg survey
  • Yen extends declines on Monday after 0.6% drop against dollar

Asian stocks rose to the highest level in a year as a weaker yen buoyed Japanese equities after a strong U.S. jobs report increased risk appetite.

The MSCI Asia Pacific Index climbed 1.4 percent to 137.59 as of 4:20 p.m. in Hong Kong, heading for its highest close since Aug. 17. Japan’s Topix index gained 2 percent after nonfarm payrolls climbed by 255,000 last month, exceeding all forecasts in a Bloomberg survey of 89 economists. The yen slid 0.4 percent after dropping 0.6 percent on Friday as demand for haven assets waned. South Korean shares advanced after the nation’s credit rating was increased one level by Standard & Poor’s.

“The lack of clarity because of the U.S. jobs data was one reason why last week’s stock markets were weak,” said Masaaki Yamaguchi, a Tokyo-based equity market strategist at Nomura Holdings Inc. “Since the results rose above both the 200,000 level and consensus forecasts, I expect markets to react positively.”

Asian equities are resuming a rally that halted last week after a fresh round of Japanese fiscal stimulus disappointed investors. The regional measure has climbed about 22 percent from a February low, shrugging off the effects of Britain’s vote to leave the European Union, as central banks unleash further monetary easing while data from the labor market to retail sales and industrial production spur confidence in the world’s largest economy.

Still, it’s been a choppy year for Asian stocks. While the Asia-Pacific gauge is up 4.3 percent, Japan’s Topix has lost 16 percent in 2016, while a gauge of Shanghai shares has dropped 15 percent.

Hong Kong’s Hang Seng Index rose 1.6 percent and a gauge of Chinese stocks listed in the city jumped to the highest close since Jan. 4. China’s exports remained sluggish last month, signaling tepid global demand, while deteriorating imports raised concern domestic conditions may be weakening anew.

Thailand’s SET Index rallied 1.5 percent to a 15-month high after the nation’s voters approved a new military-backed constitution in its first ballot in two years. The outcome means the governing junta is more likely to stick to its current time line of holding elections next year, and was a boost to investor confidence.

India’s S&P BSE Sensex Index added 0.3 percent, Indonesia’s Jakarta Composite Index climbed 0.2 percent and South Korea’s Kospi index gained 0.7 percent. Australia’s S&P/ASX 200 Index climbed 0.7 percent. New Zealand’s S&P/NZX 50 Index and Taiwan’s Taiex was up 0.6 percent.

Futures on the S&P 500 Index increased 0.2 percent. The U.S. equity benchmark index rose 0.9 percent on Friday, while the Nasdaq Composite Index advanced to a record. The U.S. jobless rate held at 4.9 percent as many of the people streaming into the labor force found jobs. Odds on the Federal Reserve raising rates by the end of this year rose to 47 percent after the jobs report, up about 10 percentage points from Thursday.

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