Latest
Recommended
Published: Tue, September 06, 2016
Economy | By Melissa Porter

Asian stocks rise as tepid jobs report stokes low rate hopes

Asian stocks rise as tepid jobs report stokes low rate hopes

South Korea's Kospi gained almost 1.0 percent in early trading to 2,057.77.

Expectations of higher rates tend to boost the dollar, as they make the currency more attractive to yield-seeking investors. Economists polled by Reuters had forecast payrolls rising by 180,000 last month.

The dollar slumped against its major peers as disappointing jobs growth in the US weakened the case for a Federal Reserve interest-rate increase this month.

Average monthly hiring over the past three months was close to the figure prior to the rate increase last December, suggesting little change in the labor-market trend, Naoto Ono, an analyst in Tokyo at Ueda Harlow Ltd., which provides margin-trading services, wrote in a note to clients.

Pointing to a solid growth in household spending and a strengthening job market, Yellen said the US economy was "now nearing" the Fed's statutory goals of maximum employment and price stability.

Fed Chair Janet Yellen said last month that the United States central bank was getting closer to raising interest rates, possibly as early as September, saying that the Fed sees the economy as close to meeting its goals of maximum employment and stable prices.

Asian stocks rise as tepid jobs report stokes low rate hopes
Asian stocks rise as tepid jobs report stokes low rate hopes

Friday's U.S.jobs report showed nonfarm payrolls rose by 151,000 jobs in August after an upwardly revised 275,000 increase in July.

With no major economic report due Monday and Tuesday, investors assessed the possibility of a September rate hike after highly-watched comments from Fed Chair Janet Yellen and Vice Chairman Stanley Fischer.

Odds of the Fed raising rates this month slid to 32 per cent as of Friday from 42 per cent a week ago, while bets for tightening in December declined six percentage points to 59 per cent, according to Fed funds futures tracked by Bloomberg. Saudi Arabia and Russian Federation said Monday at the G-20 summit that they had agreed to cooperate to stabilize the oil market but stopped short of outlining specific limits on their petroleum production.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, retreated 0.3 percent after gaining 1.5 percent over the past two weeks. He shrugged off growing market concerns that the bank is reaching its limits, and stressed that the Bank of Japan had room to deepen negative rates even as he acknowledged that that policy had its own risks. "That said, we should not hesitate to go ahead with (additional easing) as long as it is necessary for Japan's economy as a whole", Kuroda said.

Asset-buying The euro rose 0.1 per cent to $1.1164 ahead of Thursday's European Central Bank interest rate decision. Brent crude, the benchmark for global oil prices, fell 37 cents to $46.46 a barrel.

Brent crude was down 0.6 per cent at $46.53 a barrel while U.S. crude slipped 0.7 per cent to $44.13. But for the week Brent fell 6 per cent, its biggest drop in five weeks, while U.S. crude fell almost 7 per cent for its largest decline in eight weeks.

Like this: