Asian stocks closed higher Monday, supported by bullish U.S. economic data and the Bank of Japan’s easing measures.
The U.S. Labor Department reported that 255,000 jobs were created in July, significantly more than the 179,000 that economists anticipated for the month. The upbeat employment report lifted the dollar against a basket of its global rivals.
How the Asian indexes performed
In Japan, the Nikkei 225 (INDEXNIKKEI:NI225) rose 2.44%. Gains in Tokyo were led by rising stocks in Banking, Insurance and Machinery sectors. The Bank of Japan’s continuing increase of the yen supply in the market through the purchase of ETFs has been cited as one reason underpinning gains in Japanese stocks, though they are artificial given the printing of money to finance the gains.
“Because there is no summer vacation for the BOJ’s buying operations, the effects will likely be felt even larger in the market,” said Eiji Kinouchi of Daiwa Securities.
A weaker yen also played a part in pushing Japanese stocks up it boosted foreign interest in those stocks. USDJPY rose 0.33%.
In Taiwan, the Taiwan Weighted jumped 0.64% to reach a new 52-week high. Rubber, Optoelectronic and Other Electronic sectors led the stocks in the country higher.
South Korea’s Kospi gained 0.65%.
China shrugs off downbeat economic data
Stocks in China gained despite downbeat economic data showing that the country’s exports fell 4.4% in July, continuing a streak of declines that show June exports fall 4.8%. The 4.4% exports decline reported in July was stepper than 3.6% that economists anticipated.
The Shanghai Composite rose 0.92%, while the smaller HANG SENG INDEX (INDEXHANGSENG:HSI) gained 1.57%.
What happened in Australia?
Shares in Australia closed higher on Monday, with the S&P 500 jumping 0.71%. Equity gains in Australia were driven by rising stocks in the country’s Energy, Consumer Discretionary and Financial sectors.
A weaker Australian dollar also appeared to have boosted foreign interest in Australian stocks. The AUDUSD pulled back 0.07%.
A case for a rate hike
Investors are betting that the bullish labor data from the U.S. for July would provide the Fed with a reason to consider lifting lending rates. Hiking rates would be seen as confidence in the growth of the U.S. economy, which could in term fire up other global economies.