Japan leads Asia stock rally, dollar firms after blowout US payrolls

October 07, 2024

Asian stocks rallied and the dollar reached a fresh seven-week peak on the yen on Monday after blowout U.S. labour market data dispelled fears of a recession and spurred a sharp paring of rate-cut bets.

U.S. Treasury yields touched two-month highs, extending their rise after the closely watched non-farm payrolls report on Friday showed the economy unexpectedly added the most jobs in six months in September.

Crude oil prices eased from a one-month peak even as Israel bombed targets in Lebanon and the Gaza Strip, with Monday marking one year since the Hamas attack that triggered war.

Japan’s Nikkei (.N225), opens new tab led regional equity gains with a 2.28% rally as of 0515 GMT, given additional momentum by the softer yen.

Hong Kong’s Hang Seng (.HSI), opens new tab rose 1.45%, Australia’s stock benchmark (.AXJO), opens new tab added 0.68% and South Korea’s Kospi (.KS11), opens new tab gained 1.53%. Mainland Chinese stocks remain closed until Tuesday for the Golden Week holiday.

MSCI’s broadest index of Asia-Pacific shares (.MIAP00000PUS), opens new tab climbed more than 1%.

U.S. Dow futures eased slightly, after the cash index closed at an all-time peak on Friday following the payrolls data.

“The reaction in markets conveys what the key themes and risks for market participants are presently: economic growth, and its impact – for equities – on future earnings,” said Kyle Rodda, senior financial market analyst at Capital.com.

“There’s also seemingly a revival of the U.S. economic exceptionalism trade.”

The U.S. dollar pushed as high as 149.10 yen for the first time since Aug. 16 before last trading hands at 148.49 yen.

Gains were arrested after Japan’s top currency diplomat, Atsushi Mimura, said officials were monitoring foreign exchange moves, including speculative trading, “with a sense of urgency”.

The euro eased 0.08% to $1.0966, slipping back towards Friday’s seven-week trough at $1.09515.

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