Asian stocks advanced as softer-than-expected U.S. labor data alleviated inflation anxieties and lowered market expectations for Federal Reserve interest rate hikes. Investing.com reported that regional technology shares rallied strongly, driven by positive momentum from Wall Street where the Nasdaq 100 closed at a record high. Japan’s Nikkei 225 surged 2.5% to cross the 69,986 threshold, while the benchmark breached 70,000 points for the first time in three months.
Labor Data Cools Rate Hike Expectations Across Markets
The positive shift in market sentiment followed the U.S. September jobs report, which showed employers added 29,000 more jobs to their payrolls than they cut and experienced a slowdown in wage growth. This net hiring rate marked a cooling from August’s net hiring rate of 133,000. Consequently, money markets priced in less than a 25% chance of an October rate hike by the Federal Reserve, according to Investing.com. This retreat in hawkish monetary policy expectations calmed the broader bond market, pulling the 10-year U.S. Treasury yield down below 5.17% from a peak near 5.35% on Thursday.
The easing bond yields and diminished inflation pressures provided vital relief to equities, particularly in Asia. Japan led the regional advance, with the TOPIX index gaining 1.4% to reach 4,146.76 alongside the Nikkei 225 surge. Technology stocks across the region captured heavy buying interest as risk appetite returned. In Japan, Tokyo Electron shares climbed 5.5%, and SoftBank Group advanced 3.3%. Meanwhile, Taiwan Semiconductor Manufacturing Co. (TSMC) rose 2.6% amid reports of a potential collaboration with Terafab.
Corporate deals drive gains amid mixed regional trading
Market participation varied across the region due to public holidays. South Korea and mainland China remained closed for national celebrations, while Hong Kong’s Hang Seng index remained largely unchanged at 23,981.50, according to Investing.com data. Corporate activity accompanied the broader market gains in Japan, where shares of several firms rose following major structural announcements. Corporate dealmaking surfaced as companies expanded their regional footprints, including transactions in Southeast Asia valued at $1.35 billion.
Other regional markets showed mixed results. Singapore’s index gained 0.3%, while Australian and New Zealand equities traded flat. In India, the index rose to 22,430.70. Currency markets reflected changing macroeconomic conditions as the U.S. dollar climbed to 157.97 Japanese yen from 157.83 yen, while the euro softened to $1.1179.
Questions About Future Fed Policy and Inflation
Will the Federal Reserve pause rate hikes in October?
Money markets indicate less than a 25% probability of an October rate hike following the September jobs report, which showed slower hiring and reduced wage pressures.
What drove the surge in Asian semiconductor stocks?
Regional chipmakers benefited from a broader improvement in risk appetite and a record close on the U.S. Nasdaq 100, alongside reports linking Taiwan Semiconductor Manufacturing Co. to a potential collaboration with Terafab.
How did the U.S. Treasury market react to the employment figures?
The yield on the 10-year Treasury dropped below 5.17%—down from a peak near 5.35%—before recovering slightly to 5.28% as stocks pared some of their gains.
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