(Bloomberg) — Asian stocks look set for a boost Monday from Japan, where the planned exit of the prime minister sparked a rally. Traders are also weighing the impact of sharply slower U.S. hiring on the stimulus outlook.
Futures for Japan jumped more than 1%, following a surge in the Topix index Friday to a three-decade high on hopes of better pandemic management and more spending by Prime Minister Yoshihide Suga’s successor. Futures for Hong Kong edged higher but slipped for Australia.
U.S. contracts were steady. The S&P 500 ended little changed Friday, the Nasdaq 100 edged up to a record and Treasury yields rose as markets digested disappointing U.S. payroll growth coupled with faster-than-projected wage increases. U.S. markets are closed Monday for the Labor Day holiday. The dollar was mixed in early Asian trading.
The U.S. economy added 235,000 jobs in August — the smallest gain in seven months — amid spread of the delta virus variant. The soft report seems likely to prompt Federal Reserve policy makers to delay considering a move to scale back asset purchases at their September meeting.
“Shares remain vulnerable to a short-term correction,” Shane Oliver, head of investment strategy and chief economist at AMP Capital, wrote in a note. He added that the jobs data make it “almost certain that the Fed won’t formally announce the tapering of its bond buying at its September meeting and will wait for the November meeting.”
Investors will also turn their attention to the European Central Bank, which will decide this week if it should dial back economic stimulus.
The bumpy progress of President Joe Biden’s $3.5 trillion tax and spending package is in focus too. A senior White House adviser expressed confidence that a key Democratic senator who raised objections to the plan can eventually be persuaded to give his backing.
Elsewhere, gold begins the week firmer on easing concerns about a quicker start to Fed tapering. Bitcoin was trading near $52,000.
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
S&P 500 futures were steady as of 7 a.m in Tokyo. The S&P 500 was little changed FridayNasdaq 100 futures rose 0.1%. The Nasdaq 100 rose 0.3%Nikkei 225 futures rose 1.6%Australia’s S&P/ASX 200 Index futures fell 0.3%Hang Seng Index futures rose 0.1% earlier
Currencies
The Bloomberg Dollar Spot Index fell 0.2%The euro was little changed at $1.1880The yen was at 109.77 per dollarThe offshore yuan was at 6.4371 per dollar
Bonds
The yield on 10-year Treasuries rose four basis points to 1.32%
Commodities
West Texas Intermediate crude was at $69.04 a barrel, down 0.3%Gold was at $1,827.73 an ounce
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Read More: Asia Stocks Eye Japan Lift; Traders Mull Weak Jobs: Markets Wrap