Japan stocks rise after Abe’s reassurance; tech stocks rebound in Asia
Asian markets were broadly higher on Monday after strong U.S. jobs data lifted indexes on Wall Street. All eyes were on trade talks in Beijing, where American and Chinese officials are trying to resolve a trade dispute that threatens to worsen an economic slowdown and put a drag on the global economy
Japan’s benchmark, bouncing back from steep losses last week, started the day trading over 3% higher. By midday, the Nikkei 225 index NIK, +2.44% was up 2.8% after Prime Minister Shinzo Abe said Sunday the government would keep a close eye on risk as it plots out its economic policy. “Japan’s economic fundamentals are sound, but we’d like to guide policy with a close eye on the various risks,” he said, according to Reuters. Toyota shares 7203, +3.15% jumped 3% and Honda 7267, +3.69% surged 3.4%. SoftBank Group 9984, +3.67% rose more than 4% and Nintendo 7974, +5.85% gained more than 5%.
Hong Kong’s Hang Seng HSI, +0.82% climbed 0.7%, with Apple AAPL, +0.09% iPhone component makers AAC 2018, -0.12% and Sunny Optical 2382, +2.28% up more than 2% each following steep losses last week. Tech giant Tencent0700, +2.25% rose 1.7%.
The Shanghai Composite index SHCOMP, +0.72% gained 0.4% and the smaller-cap Shenzhen Composite 399106, +1.71% rose 1.2%.
South Korea’s Kospi SEU, +1.34% gained 1.2% as Samsung 005930, +3.47% jumped 3%. Australia’s S&P-ASX 200 XJO, +1.14% added 1.2%. Shares also rallied in Taiwan Y9999, +2.21% and throughout Southeast Asia.
U.S. indexes soared on Friday after the Labor Department announced that employers added a better-than-expected 312,000 jobs in December. While the unemployment rate rose slightly, it was taken as a good sign that more people were looking for jobs. Gains were also supported by Federal Reserve Chairman Jerome Powell saying that the central bank will be flexible in deciding if and when it raises interest rates. The broad S&P 500 index SPX, +3.43% advanced 3.4% to 2,531.94. The Dow Jones Industrial Average DJIA, +3.29% rose 3.3% to 23,433.16 and the Nasdaq composite COMP, +4.26% was up 4.3% at 6,738.86. Around 90 percent of the stocks on the New York Stock Exchange closed higher.
A U.S. delegation, led by Deputy U.S. Trade Representative Jeffrey Gerrish, will sit down for two days of talks with Chinese officials starting Monday. The Commerce Ministry did not give further details on who will be leading Chinese negotiators or on the meeting’s agenda. No agreement is expected, but any progress in a trade dispute that caused both sides to impose billions of dollars of tariffs on each other’s goods will be welcomed. Over the weekend, President Donald Trump told reporters at the White House that negotiations were going “very well” and investors will be keen to see what comes next. Last month, Trump and Chinese leader Xi Jinping agreed to hold off on further tariffs for 90 days, to resolve a range of issues stemming from Beijing’s technology policy.
”The potential of movement on China-U.S. trade means a moderation of extreme bearishness around the outlook for global growth,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said in an interview. “Stronger U.S. jobs and wage data on Friday night are key fundamental contributors to the rally,” he added.
U.S. crude oil CLG9, +1.90% added 66 cents to $48.62 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 1.8 percent to $47.96 a barrel on Friday. Brent crude LCOH9, +1.58% , used to price international oils, rose 59 cents to $57.65 per barrel. It gained 2 percent to $57.06 per barrel in London.
The dollar USDJPY, -0.26% weakened to 108.15 yen from 108.52 yen late Friday.