Asian Markets Rally as Weak US Jobs Report Eases Fed Hike Fears

Asian markets rallied on Monday after a weaker-than-expected US jobs report eased fears of an imminent Federal Reserve rate increase. The KOSPI surged 1.1%, while Japan's Nikkei 225 rose about 2%. MSCI's broadest Asia-Pacific gauge outside Japan gained 0.8%.

The US nonfarm employment fell by 23,000 in July, with May and June revised down by a combined 103,000 jobs. The unemployment rate edged lower to 4.1%, largely due to labor-force participation falling to 61.4%. This led to a sharp drop in expectations for a September Fed increase, with futures markets putting the probability at about 44%.

The US consumer-price data release on Wednesday will be closely watched, as economists expect headline CPI to rise 0.1% from June and core prices to increase 0.2%. JPMorgan economist Michael Feroli believes a core reading around 0.22% may not be enough to force a September move.

The lower US rate-hike expectations gave Asian technology markets some breathing room after several weeks of sharp moves in AI-linked shares. The Nikkei's gain put Japan among Monday's strongest major markets, while the KOSPI rose after seven consecutive weekly declines.