Asian Markets Surge as Weak US Jobs Report Eases Rate Hike Fears

Asian markets rallied on Monday after a surprisingly weak US jobs report eased fears of an imminent Federal Reserve rate increase, giving risk appetite a boost even as oil prices moved higher due to renewed uncertainty around the Strait of Hormuz.

The KOSPI in South Korea surged 1.1%, while Japan's Nikkei 225 rose about 2% and MSCI's broadest Asia-Pacific gauge outside Japan gained 0.8%. The advance followed record closes on Wall Street on Friday, where investors treated softer hiring as a reason for the Fed to stay patient.

The US nonfarm employment fell by 23,000 in July, with May and June revised down by a combined 103,000 jobs. This change in tone across global markets pushed expectations for a September Fed increase sharply lower, with futures markets putting the probability of a quarter-point move at about 44% on Monday.

Treasury yields edged higher in Asia after Friday's rally, with the 10-year yield around 4.66%. Lower US rate-hike expectations gave Asian technology markets some breathing room after several weeks of sharp moves in AI-linked shares.