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Sydney - Asian equities returned to the highest in almost 10 years after strong US hiring data bolstered optimism about economic growth in the world’s largest economy.
Japan’s Topix index is on course for a two-year high, boosted by earnings at Toyota Motor and as the yen clung to losses. Benchmarks in Australia, South Korea and Hong Kong also gained, following fresh highs on the Dow Jones Industrial Average when the greenback climbed on better-than-forecast hiring data and a pick-up in wage growth in July.
Iron ore futures in Singapore surged as steel prices also advanced. Oil held above $49 a barrel ahead of the Organisation of Petroleum Exporting Countries (Opec) talks on complying with cuts to reduce global supply.
Broad-based hiring in July along with stronger household incomes and buoyant consumer confidence may give the Federal Reserve reason to raise interest rates later this year as it seeks to normalise monetary policy. Non-farm payrolls rose 209 000, against expectations for 180 000.
The dollar’s bounce propelled it higher from the lowest since 2015 as investors sought faster growth in economies outside the US.
China expressed confidence that new United Nations sanctions would help bring North Korea to the negotiating table to end its push for nuclear weapons and ballistic missiles.
Vice President Mike Pence disputed a report Saturday suggesting that he may be among Republicans preparing for run for president in 2020 if Donald Trump doesn’t seek a second term, calling it "laughable and absurd."
Among the key events looming:
China’s foreign reserves probably expanded to $3.075trn in July. Japan’s leading and coincident indexes for June are due. Later in the week we get Chinese and Japanese trade data, South Korean unemployment and Australian reports on business and consumer sentiment, as well as a slew of European factory output indicators, including German industrial production for June on Monday. In the US, inflation data is due later in the week.
The market will also be parsing speeches from US policy makers, including Neel Kashkari, the Minneapolis Fed president, and Federal Reserve Bank of St Louis President James Bullard.
Here are the main moves in markets:
Stocks
Japan’s Topix index rose 0.6%. Toyota jumped 1.8% after it beat first-quarter profit estimates and raised its full-year forecast on Friday. The S&P/ASX 200 Index in Sydney was up 1% with miners and banks advancing. South Korea’s Kospi index gained 0.5%.
In Hong Kong, the Hang Seng Index rose 0.4%. The MSCI Asia-Pacific Index added 0.6% to trade close to its highest since December 2007.
Contracts on the S&P 500 Index rose 0.2% as of 1:16pm in Tokyo after the gauge advanced 0.2% on Friday, ending one point below an all-time high and capping a weekly gain.
Currencies
The yen was little changed at 110.69 per dollar. The euro was higher at $1.1799 after losing ground on Friday as the dollar rebounded on the non-farm payroll data. The Bloomberg Dollar Spot Index fell 0.1%.
It rose 0.6% on Friday as the greenback advanced against all its G-10 pees after the jobs data beat economists’ forecasts.
Bonds
The yield on 10-year Treasuries was trading at 2.27% after advancing four basis points on Friday to 2.26%. Futures on Australian bonds of similar maturities were trading lower on Monday.
Commodities
West Texas Intermediate crude declined 0.3% to $49.42 a barrel. Representatives of Opec meet with their allies for a two-day gathering starting on Monday in Abu Dhabi to discuss why some of them are falling behind in pledges to reduce production.
Gold was little changed at $1,258.48 an ounce, after losing 0.8% on Friday. Iron ore futures in Singapore gained as much as 7.3% to $77.84 a ton, the highest level since April.
Steel prices also rose, with reinforcement-bar futures in China as much as 6.3% higher at 4 013 yuan a ton, surging by the exchange-set limit.
Plans by the Tangshan government to cut steel capacity by 50% in winter, coupled with a drop in rebar inventory across China have spurred gains, according to Chinese brokerage Sinosteel Futures.
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