Asian Markets Rally on Weak US Jobs Data and Lower Rate Hike Chances
Asian stock markets surged on Monday following the release of weaker-than-anticipated US jobs data, which reduced the likelihood of a Federal Reserve interest rate hike this month. The US economy added just 29,000 jobs in September, significantly below the expected 90,000, and previous months' figures were revised downward. The revised data led markets to lower their expectations for a rate hike, with the probability dropping to just over 20% from over 65% earlier in the week.
Tech-heavy markets benefited the most from the reduced rate hike expectations, as tech firms rely heavily on debt to fund their investments. Tokyo's Nikkei 225 index jumped more than 2.5% to surpass 70,000 points for the first time since July, while Taipei also saw a similar rise. Other markets like Sydney, Singapore, Manila, and Jakarta gained, though Hong Kong and Wellington experienced declines. Shanghai and Seoul were closed for holidays.
The positive market sentiment was further bolstered by the G7 leaders' decision to release 100 million barrels of diesel and crude oil from their reserves over four months and to refrain from imposing export restrictions on energy. Despite this, oil prices continued to fall, with both West Texas Intermediate and Brent North Sea Crude declining. The drops were limited by news of Yemen's government launching a military operation to retake territory held by the Houthis.
Key figures around 0230 GMT showed the Nikkei 225 up 2.5% at 70,037.61, while the Hang Seng Index in Hong Kong was down 0.1% at 23,945.35. Oil prices saw West Texas Intermediate down 1.2% at $90.04 per barrel and Brent North Sea Crude down 0.8% at $101.47 per barrel. The dollar/yen exchange rate fell to 157.81 yen, and other major currency pairs also saw declines.