Asia-Pacific Stocks Surge on Weak US Jobs Data

Asia-Pacific stock markets started the week on a positive note, driven by optimism that lower global borrowing costs will persist. The US nonfarm payrolls data for July revealed an unexpected contraction of 23,000 jobs, significantly below the consensus estimate of an 80,000 gain.

This surprise drop has sharply reduced the likelihood of a Federal Reserve interest rate hike in September 2026, fueling a rally in Asian markets. Japan's Nikkei 225 gained 1.30%, while South Korea's KOSPI rose 1.06% on Monday morning.

The market-implied probability of a Fed rate hike in September 2026 fell to approximately 44% from 55% prior to the jobs release. The US unemployment rate declined to 4.1% in July 2026, defying expectations for it to hold steady.