Asian equities advanced on Monday after a softer-than-expected U.S. employment report reduced pressure on the Federal Reserve to raise interest rates again. Japan led regional gains, with the Nikkei 225 rising more than 2% as technology shares rallied.
The MSCI Asia Pacific equities index gained 0.4%, while Japan’s Nikkei 225 climbed 2.03% and the broader Topix advanced 1.11% . The rally extended a record close on Wall Street, where the Nasdaq Composite reached an intraday all-time high on Friday before finishing up 1.19% .
South Korea’s stock market remained closed for the National Foundation Day holiday. Chinese mainland markets were also shut for a public holiday . Hong Kong’s Hang Seng index slipped 0.4% .
Futures for U.S. equities pointed higher, with Nasdaq 100 contracts gaining 0.4% . In early Asian trading, S&P/ASX 200 futures were up 26 points, or 0.29% .
U.S. Jobs Report Drives Sentiment
The September U.S. nonfarm payrolls report showed employers added just 29,000 jobs, far below analyst expectations of 84,000. The unemployment rate rose to 4.2% from 4.1% in August .
Money markets now price in less than a 25% chance of a Fed rate hike in October, down from nearly 30% before the data was released . The softer labor-market reading prompted traders to pare back expectations for further tightening.
Treasury yields initially fell on the report but reversed higher. The U.S. 2-year yield dropped as much as 9 basis points before finishing the session up 3 basis points at 4.82% . The benchmark 10-year yield hit its highest level since 2002 last week .
Bond markets remain under strain from persistent inflation, government spending concerns, and heavy corporate borrowing to fund artificial intelligence infrastructure . Investors are looking ahead to this week’s auctions of 10- and 30-year U.S. Treasuries, which will test demand for longer-dated debt .
Technology Stocks Lead Regional Gains
In Japan, technology shares drove the advance. Advantest rose over 4%, Renesas Electronics gained more than 4%, and SoftBank Group added over 3% . Tokyo Electron climbed more than 3% .
TSMC rose around 3% on reports of a potential collaboration with Elon Musk’s Terafab, adding strength to the regional semiconductor sector . Nippon Paint shares rose 1% after agreeing to acquire Akzo Nobel’s Southeast Asian unit in a deal valued at $1.35 billion .
Reports that Japan plans a $140 billion investment program to accelerate data-center construction also boosted sentiment. JERA, Dell, and UK-based AI infrastructure firm Rhaelm recently agreed to invest $15 billion in a 400-megawatt data center near Tokyo .
Oil Volatile as G7 Releases Reserves
Brent crude for December delivery rose above $103 a barrel early Monday before paring gains to trade around $102. The contract gained almost 5% last week . West Texas Intermediate fell 0.6% to $90.60 a barrel .
Oil prices drew support after Yemen launched a bid to recapture Houthi-controlled areas . However, supply relief came as G7 nations agreed to release 100 million barrels of oil and fuel products from emergency reserves over four months through coordination with the International Energy Agency .
OPEC+ producers agreed to hold oil production quotas unchanged next month .
Other Assets
Spot gold rose 0.37% to $4,158 an ounce, while spot silver gained 1.53% to $61.37 an ounce . Bitcoin jumped more than 2% to break above $86,000 .
The Japanese yen strengthened 0.1% to 157.63 per dollar. The offshore yuan was little changed at 6.7068 per dollar .
Investors will watch the ISM services report on Monday and the Fed’s September meeting minutes due Wednesday for further clues on the rate outlook .
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