Asian-Pacific markets advanced on Monday, with Japan’s Nikkei 225 leading the way, climbing nearly 2% as investors anticipated key central bank decisions across the region.
Strong performances in financials, consumer cyclical stocks, and a significant boost from gaming giant Nintendo drove the index’s gains.
Meanwhile, the US jobs report added to global optimism, pushing the dollar higher and easing concerns over further Federal Reserve rate cuts.
Nintendo shares rise after Saudi investment interest
Japan’s Nikkei 225 surged 2.18%, with shares of Nintendo jumping 3.8% following reports that Saudi Arabia’s sovereign wealth fund is considering raising its stake in the company.
This news comes as part of broader interest by the fund in Japanese gaming firms.
Financial companies such as Mizuho Financial Group and Mitsubishi UFJ Financial Group also contributed to the Nikkei’s gains.
The yen, meanwhile, strengthened 0.16% to trade at 148.46 after hitting its weakest level in over two months earlier in the session.
New Japanese Prime Minister Shigeru Ishiba remarked that the environment was not yet ready for additional rate hikes by the Bank of Japan, further adding pressure on the yen.
Central banks in focus: Korea, New Zealand, India
Three major central banks in the Asia-Pacific region will make key interest rate decisions this week.
The Bank of Korea (BOK), the Reserve Bank of New Zealand (RBNZ), and the Reserve Bank of India (RBI) are all set to release their decisions, with economists predicting rate cuts from the BOK and RBNZ while expecting the RBI to maintain its current stance.
A Reuters poll indicated that the BOK might lower its benchmark rate to 3.25% from 3.5%.
Meanwhile, the RBNZ is expected to make a 50-basis-point cut to 4.75% following an unexpected rate cut in August. The RBI is forecast to hold rates steady, as India contends with inflationary challenges and global economic uncertainties.
US jobs report drives global optimism
Optimism in the Asia-Pacific markets was further boosted by a strong US jobs report from Friday, which showed that nonfarm payrolls grew by 254,000 in September, well above economists’ forecasts of 150,000.
Additionally, the unemployment rate fell to 4.1%, beating expectations that it would remain at 4.2%.
The positive jobs data has calmed concerns that the Federal Reserve may need further drastic rate cuts, providing a boost to the U.S. dollar and lifting sentiment across global markets.
In response, US stocks rallied on Friday, with the S&P 500 rising 0.9%, the Nasdaq Composite jumping 1.22%, and the Dow Jones Industrial Average gaining 0.81% to reach an all-time closing high of 42,352.75.
Australia’s lithium stocks surge on acquisition news
In Australia, the S&P/ASX 200 rose 0.46%, with lithium stocks leading the charge. Shares of Liontown Resources surged 16.22%, following Rio Tinto’s expressed interest in acquiring US lithium producer Arcadium.
Other lithium players, including Mineral Resources, Pilbara Minerals, and IGO, also saw significant gains, rising 5.06%, 3.61%, and 3.36% respectively.
Arcadium’s Australia-listed shares spiked by more than 42% in response to the news.
Other Asian markets see gains
In South Korea, the Kospi reversed earlier losses to close 0.98% higher, while the small-cap Kosdaq index rose by 1.3%.
Hong Kong’s Hang Seng index advanced 1.14% despite mainland China’s markets remaining closed for the Golden Week holiday, with trading set to resume on Tuesday.
Looking ahead: central bank decisions to shape markets
As investors await this week’s interest rate decisions from central banks in Korea, New Zealand, and India, attention remains focused on how these outcomes will influence market sentiment in the short term.
Additionally, the US Federal Reserve’s response to economic data, such as the strong jobs report, will continue to play a significant role in shaping the global economic landscape.
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