Asia markets mixed as Fed hike bets fade post-US jobs data

Asian markets kicked off the week with subdued trading amid holidays in China and South Korea, leaving investors to react to Wall Street's Friday moves. In Hong Kong, the Hang Seng Index dropped 0.04% to 23,963, while the tech index fell 0.47% and the China Enterprises Index declined 0.12%. The weaker-than-expected US jobs report last week dampened expectations of aggressive Federal Reserve rate hikes, with traders now pricing in just a 22% chance of a rate increase this month, down from 64% a week earlier.

The Tokyo Nikkei surged 1.18% at the open, later climbing 1,656 points, as the prospect of a Fed pause boosted sentiment. Meanwhile, Brazil's markets anticipated gains after Senator Flavio Bolsonaro advanced to the presidential runoff, outperforming expectations. In bonds, US 10-year Treasury yields slipped to 5.2643%, though yields remain elevated due to government fiscal pressures and energy costs.

The US dollar weakened against major currencies, with the euro rebounding from a 17-month low and sterling edging higher. Analysts noted that while US growth and demand for US securities support the dollar, tighter policies elsewhere and Fed pause expectations pose challenges. Oil prices stayed high after reports of missile and drone attacks on Saudi Aramco facilities by Yemen's Houthis.