Asian Stocks Rise After Weak US Labor Market Data

Asian stocks rose on Monday as weaker US labor market data reduced expectations for further Federal Reserve rate hikes, supporting technology companies and easing pressure on bonds.

Japan led the region's growth: Nikkei 225 added 2.5 percent to 69,986, TOPIX – 1.4 percent to 4,146.76. South Korea and mainland China remained closed due to public holidays, while Hong Kong's Hang Seng was virtually unchanged – 23,981.50. On Wall Street, sentiment remained positive, although US futures were weaker during Asian trading. Nasdaq 100 closed at a record high on Friday, while Nasdaq 100 futures lost 0.1 percent to 31,037.75, and S&P 500 futures – 0.1 percent to 7,768.75.

The retreat followed Friday's employment report: US employers hired fewer workers than expected, and wage growth slowed. This led money markets to assess the probability of an October Fed rate hike at less than 25 percent. The yield on 10-year US government bonds fell by 2 basis points to 5.25 percent. The respite came after a prolonged bond sell-off driven by concerns over inflation, government spending, and corporate borrowing for AI development. TSMC rose about 3 percent on reports of potential collaboration with Elon Musk's Terafab, supporting the regional semiconductor sector. Nippon Paint added 1 percent after agreeing to acquire Akzo Nobel's Southeast Asia division for $1.35 billion.

Straits Times in Singapore added 0.3 percent, S&P/ASX 200 in Australia and NZX 50 in New Zealand traded unchanged. Nifty 50 in India rose to 22,430.70, Sensex added 0.1 percent to 71,961.20, while Nifty Smallcap 250 fell by 0.1 percent. Oil retreated: December Brent fell by 0.6 percent to approximately $101.60 per barrel, although it had earlier risen above $103 during the session. The early rise was linked to escalating tensions in Yemen, which markets assessed in terms of supply risks. The combination of weak US employment data, lower bond yields, and growth in the tech sector improved risk appetite in Asia. However, elevated long-term yields, concerns about the European bond market, and geopolitical risks leave markets vulnerable to renewed volatility.