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Asian Markets Mixed Amid Strong U.S. Jobs Report

Asian Markets Mixed Amid Strong U.S. Jobs Report

Asian markets mixed as strong U.S. jobs report impacts interest rate expectations; Japan’s GDP contraction slightly improves.

Asian stock markets presented a mixed picture on Monday, influenced by a robust U.S. jobs report that indicated stronger-than-expected hiring and wage growth in May. This development has tempered expectations of imminent interest rate cuts by the Federal Reserve.

In Japan, the Nikkei 225 index fell by 1.02%, reacting to the release of revised first-quarter GDP figures showing an annualized contraction of 1.8%. This figure was slightly better than the initially reported 2% decline but still below the 1.9% contraction anticipated by economists. Investors are now keenly awaiting the Bank of Japan’s rate decision on Friday. Meanwhile, the Shanghai Composite increased by 0.09%, and Hong Kong’s Hang Seng index decreased by 0.59%. Australia’s ASX 200 index saw a modest rise of 0.49%.

The news also influenced commodities. Gold fell by 0.53% to $2312.5 per ounce, while silver rose by 0.861% to $29.68 per ounce. Oil prices slightly increased, with Brent crude at $79.83 per barrel (up 0.25%) and WTI crude at $75.71 per barrel (up 0.23%).

Bond yields reflected the mixed sentiment in the markets. The U.S. 10-year Treasury yield stood at 4.45%, the UK 10-year yield at 4.21%, and Germany’s 10-year yield at 2.62%.

Asian Markets Mixed Amid Strong U.S. Jobs Report

In economic news, Canada’s employment data was slightly better than expected, with an employment change of 26.7K versus the anticipated 24.8K and the unemployment rate holding steady at 6.2%. In the U.S., the non-farm employment change was significantly higher than expected at 272K, compared to the forecasted 182K. At the same time, the unemployment rate ticked slightly to 4.0% from the expected 3.9%.

The stronger U.S. jobs report has led traders to believe that the Federal Reserve might hold off on cutting interest rates in the near term. Consequently, the Federal Open Market Committee meetings scheduled for this week and July are unlikely to result in a rate reduction.

Several Asian markets, including those in Australia, mainland China, Hong Kong, and Taiwan, closed for holidays on Monday. In the U.S., Wall Street saw a relatively stable close on Friday, with the S&P 500 remaining flat after reaching an intraday record high. The Dow Jones Industrial Average fell by 0.22%, and the Nasdaq Composite decreased by 0.23%. Nevertheless, all three major U.S. indices posted gains for the week, with the Dow up by 0.29%, the S&P 500 by 1.32%, and the Nasdaq by 2.38%.

Investors will focus on upcoming economic releases, including Japan’s M2 Money Stock data, which is expected later tonight at 11:50 PM GMT. Additionally, China and India will release May inflation numbers on Wednesday, which will be closely watched for indications of economic health and policy direction in the region.

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