Michael Hewson, chief market analyst at CMC Markets, said: “A decent USA payrolls number on Friday followed by a victory by Japanese prime minister Shinzo Abe in the Japanese Upper House elections at the weekend has helped push Asia markets higher this morning with the Nikkei 225 posting its highest levels since 24 June on speculation that an improved mandate will prompt the Japanese government to finally implement the long awaited third arrow of Abenomics”.
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He added, however, that the United States dollar could bounce back if upcoming U.S. economic data and comments from Federal Reserve officials appear to favour a Fed interest rate rise in September, a view that has lost support of late.
Crude oil futures were slightly higher Friday after an upbeat U.S.jobs reports soothed post-Brexit fears. Stocks in Germany were seen starting 0.9 percent higher, with the CAC up 0.7 pct and the FTSE 0.5 percent.
The yen weakened against most major currencies after Abe declared victory yesterday with his ruling conservative party winning a majority in the 121-seat upper house in Japan. The New Zealand dollar NZD= hit a 14-month high of $0.7318 while the Australian dollar rose 1.3 percent against the greenback AUD=4.
Abe has cast the election as a referendum on his “Abenomics” recipe of hyper-easy monetary policy, spending and reform. While he has released few details, investors are betting he’ll keep flooding the markets with money by expanding bond purchases using newly printed money in a program known as quantitative easing.
“We are also see a breakdown in the USA bond market”, said Rob Zukowski, senior technical analyst at New York-based 4Cast Ltd.
Benchmark U.S. crude fell 65 cents, or 1.4 percent, to close at $44.76 a barrel in NY. The Dow Jones industrial average was up 114 points, or 0.6 percent, to 18,261.
ENERGY: Benchmark U.S. crude fell 65 cents, or 1.4 percent, to close at $44.76 a barrel in NY.
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The yen fell 2.3 per cent to 102.80 per USA dollar at 5pm in NY, its steepest slide since October 2014. Brent crude, a standard for global oil prices, lost 51 cents, or 1.1 percent, to $46.25 a barrel in London. But the report did not change the view that the Fed may not hike rates this year, particularly after May payroll growth was revised down to 11,000 from 38,000.The euro was steady at $1.1051, after recovering from Friday’s low of $1.1002. AP material published by LongIsland.com, is done so with explicit permission. This includes the preparation of derivative works of, or the incorporation of such content into other works.
