Asian shares rise, US dollar stands tall after upbeat jobs report

Electronic boards display market indices at the Tokyo Stock Exchange on June 27.
Electronic boards display market indices at the Tokyo Stock Exchange on June 27.PHOTO: BLOOMBERG

TOKYO (REUTERS) - Asian shares rose on Monday (Aug 8) and the US dollar stood tall after a stronger-than-expected July jobs report lifted confidence in the strength of the US economy - heightening expectations that the US Federal Reserve could hike interest rates this year.

July non-farm payrolls rose by 255,000 jobs and the June increase was revised upwards to 292,000, the Labour Department said on Friday. Economists polled by Reuters had forecast July payrolls would increase by 180,000.

"The robust US labour market data raise the chances for monetary policy normalisation by the Fed, but uncertainties for the US remain high as well," wrote strategists at Barclays.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 per cent in early trading, after gaining 0.7 per cent last week. US shares logged solid gains on Friday, with both the S&P 500 and the Nasdaq Composite closing at record highs.

Japan's Nikkei stock index, which skidded 1.9 per cent last week in the face of a strengthening yen, was 1.6 per cent higher in early trade.

The dollar was up 0.3 per cent at 102.07 yen. It was steady against the euro at US$1.1085.

The dollar index, which tracks the greenback against a basket of six major rivals, was 0.1 per cent higher at 96.295 , not far from a one-week high of 96.522 hit on Friday after the jobs report.

"The dollar appears to be holding strong for now, but after this week, there are lots of uncertainties," said Mr Masafumi Yamamoto, chief currency strategist for Mizuho Securities.

While major currencies are expected to stick to recent ranges, market participants say thin market conditions could amplify moves, and higher US rates were far from guaranteed.

After the US jobs report, Fed fund futures priced in an 18 per cent chance the central bank would raise rates as early as its September policy meeting, from 9 per cent late Thursday, according to the CME's FedWatch tool. Futures showed about a 47 per cent chance of a December hike, compared with about 32 per cent on Wednesday last week.

Spot gold shed 0.1 per cent to US$1,333.26 an ounce, a low not seen since July 29.

Crude oil futures, which ended modestly lower on Friday, rose in early trading. US crude added 0.6 per cent to US$42.03 a barrel, while Brent crude was up 0.4 per cent at US$44.45.