Nikkei 225 surged 2.03% on Monday, lifting the Tokyo Stock Exchange’s top index to a record high for the week. The MSCI Asia Pacific index added 0.4%, with Japanese shares alone climbing over 2%, whereas Hang Seng futures slipped 0.2% as Hong Kong paused trading for National Foundation Day. In India, the GIFT Nifty signaled a muted start for the day, reflecting broader caution across the region.
The U.S. Labor Department released a September payroll report that fell short of expectations: employers added 194,000 jobs versus the 250,000 forecast, unemployment edged up to 4.2%, and wage growth slowed to 4.1% year‑on‑year. Bloomberg’s market model now prices in less than a 25% chance of a Fed rate hike in October, a sharp decline from the 60% odds seen a month earlier.
Bond markets stayed under pressure, with the U.S. 10‑year yield hitting its highest level since 2002 last week. The brief rally in Treasury prices on Friday was short‑lived, as traders digested the weak payrolls data. Investors are now watching this week’s 10‑ and 30‑year Treasury auctions, which will gauge demand for longer‑dated debt.
Oil prices added a layer of volatility: Brent crude for December delivery briefly topped $103 before settling near $102, marking a 5% rise over the past week. West Texas Intermediate fell 0.6% to $90.60 a barrel. The price move came after OPEC+ agreed to keep production quotas unchanged next month and amid renewed tensions in Yemen.
Looking ahead, market participants will focus on the Fed’s minutes due on October 7, which could reveal how policymakers view inflation and employment trends. The upcoming Treasury auctions and the Fed’s stance will be key to determining whether Asian equities maintain momentum or retrace as U.S. data continues to temper expectations.