Asian stocks rose, following U.S. shares higher, after weaker-than-expected payrolls data in the world’s biggest economy tempered speculation the Federal Reserve may raise interest rates as soon as this month.
The MSCI Asia Pacific Index gained 0.5 percent to 138.91 as of 9:01 a.m. in Tokyo. The S&P 500 Index rose 0.4 percent on Friday, halting a three-day decline, after the jobs report showed American employers added 151,000 workers to nonfarm payrolls in August, below the 180,000 projected by economists. That brought relief to investors, as odds of the Fed raising rates this month slid to 32 percent from 42 percent a week ago, while bets for tightening in December declined six percentage points to 59 percent.
“Friday’s non-farm payrolls report noticeably underperformed market expectations and effectively killed off the outside possibility of a September rate hike by the Fed,” Angus Nicholson, a strategist at IG Ltd. in Melbourne, wrote in an e-mail to clients. “The September rate hike speculation was mostly driven by the slew of suddenly hawkish Fed member commentary while the actual economic data over the past few weeks has mostly missed expectations.”
The gauge of Asian shares has been in a holding pattern since Fed Chair Janet Yellen indicated last month the central bank’s decision on raising the rate depends on the degree that data “continues to confirm” the outlook, indicating that the case for higher borrowing costs is getting stronger. Friday’s jobs data, along with weaker-than-forecast U.S. manufacturing on Thursday, raised speculation that patchy growth in the economy may prompt the Fed to sit pat for longer.
Japan’s Topix index added 1.1 percent as the yen weakened to trade at 103.94 against the dollar. South Korea’s Kospi index climbed 0.5 percent. Australia’s S&P/ASX 200 Index added 0.4 percent. New Zealand’s S&P/NZX 50 Index was little changed. Markets in China and Hong Kong have yet to start trading.
Futures on the FTSE China A50 Index gained 0.2 percent in their most recent trading, while those on the Hang Seng Index advanced 0.9 percent. The Hang Seng Index climbed 0.5 percent on Friday, extending gains for the week to 1.6 percent, as CK Hutchison Holdings Ltd. rose after getting approval for an Italian merger, and Bank of China Ltd. extended a rally after its earnings beat estimates. The Shanghai Composite Index added 0.1 percent.
Futures on the S&P 500 Index climbed 0.1 percent on Monday. U.S. markets are shut on Monday for the Labor Day holiday.
To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net. To contact the editors responsible for this story: Jeff Sutherland at jsutherlan13@bloomberg.net, Anna Kitanaka, Andreea Papuc
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