Nikkei jumps 2.4% as weak US jobs data cools Fed rate-hike bets
Japan's Nikkei closed 2.4% higher at 69,946.86, a three-month high, on Monday 5 October after soft US payrolls cut the odds of a Federal Reserve hike this month to about 18% from 64% a week earlier, Reuters reported. Trade was thin with mainland China and South Korea on holiday.
Asian shares rose on Monday, 5 October, led by Tokyo, as investors scaled back bets that the US Federal Reserve will raise interest rates again this month, according to dpa, RTHK and Reuters.
Tokyo leads, holidays thin trading
The Nikkei 225 closed 2.4% higher at 69,946.86, a three-month closing high, after briefly crossing 70,000 for the first time in three months, dpa reported. The broader Topix added 1.33% to 4,145.22, with chip-related stocks such as Advantest and Tokyo Electron and the investment group SoftBank among the top gainers, up 3% to 6%. Hong Kong’s Hang Seng rose 0.28% to 24,040.34 on light turnover. Mainland China (Golden Week) and South Korea (National Foundation Day) were closed.
Why the Fed outlook shifted
US data on Friday showed the economy added just 29,000 jobs in September, well below forecasts of around 90,000, with the previous two months revised down, RTHK noted. Investors now see about an 18% chance of a Fed rate increase this month, down from 64% a week ago, according to CME FedWatch data cited by Reuters, though a move in December remains largely priced in. Stephen Innes of SPI Asset Management described the hiring trend as settling into a “not-too-hot, not-too-cold Goldilocks porridge zone.”
Borrowing costs remain high: the US 10-year Treasury yield stood at about 5.28%, Reuters reported.
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