Asian shares rose on Monday after a weaker-than-expected United States jobs report prompted investors to trim expectations that the Federal Reserve would rise interest rates as early as this month.
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MSCI’s broadest index of Asia-Pacific shares outside Japan extended early gains and was up 1.4% by midday. Bank of Japan Gov. Haruhiko Kuroda signaled on Monday that he wouldn’t retreat from monetary easing, but suggested caution on further interest rate cuts.
Stocks in Europe and Asia started the week higher, helped by a steep rise in oil prices and expectations the Federal Reserve would keep interest rates on hold for longer. Stock rose and the dollar fell on Friday, Sept. 2, 2016, after a key report showed the USA economy added slightly fewer jobs than expected in August, making it potentially less likely that the Federal Reserve will raise interest rates already this month.
USA stock futures edged up 0.2 per cent, though United States stock and bond markets will be closed on Monday for the Labor Day holiday. The jobs numbers were a little disappointing, but not bad, certainly if the two previous months, in which there was substantial growth in employment, are taken into account.
“The disappointing August nonfarm payrolls report essentially reduced the risk or delayed a September fed funds rate hike”, said Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney.
Japan’s Nikkei Stock Average gained 0.7%.
Markets were also keeping watch on the two-day summit of leaders from Group of 20 (G-20) nations, in Hangzhou, China.
He shrugged off growing market concern that the bank is reaching its limits and stressed that the BoJ had room to deepen negative rates even as he acknowledged that policy had its own risks.
If the USA labor market is robust enough, analysts said it is possible for the US central bank to hike interest rates soon. The fall was unexpected as the initial estimate for August was 53.3 and has stoked speculation that the European Central Bank will enact a further stimulus on Thursday at its regular policy meeting.
ENERGY: U.S. benchmark crude oil gained 79 cents to $45.23 a barrel in electronic trading on the New York Mercantile Exchange.
In August, average hourly earnings for all employees on private nonfarm payrolls rose by 3 cents to 25.73 US dollars. But for the week Brent fell 6 per cent, its biggest drop in five weeks, while USA crude fell almost 7 per cent for its largest decline in eight weeks.
The writers argue that rating the world in terms of developed and emerging markets, among other things, is to hold an erroneous view in tracking the movements of global capital.
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USA stocks fluctuated in the past week, as Wall Street digested Federal Reserve officials’ remarks and a batch of economic data from the country.
