Asia markets, dollar rally after US jobs data

Pedestrians are reflected on an electronic stock indicator at a window of a security company displaying the current rate of the Tokyo Stock Exchange in Tokyo. (Photo: AFP/Toshifumi Kitamura)

All three main indexes in New York surged on Friday after the Labor Department said the world's top economy created almost 50,000 more jobs than expected in June, reinforcing the view that it is back on track.

While there was disappointment at another weak reading on wage growth, analysts said the news was greeted with open arms by dealers after a tough week on trading floors caused by geopolitical tensions following North Korea's latest missile test.

"The non-farm payroll figures exceeded expectations and boosted risk appetite among investors," said Milan Cutkovic, market analyst at AxiTrader.

Asian investors tracked their US counterparts. Tokyo ended 0.8 per cent higher, while Sydney jumped 0.4 per cent.

Hong Kong also rose 0.6 per cent with Wanda Hotel Development soaring almost 50 per cent after its parent said it would sell dozens of hotels and other projects to developer Sunac China Holdings in a US$9.3 billion deal to reduce debt.

Also in Hong Kong state-run Cosco Shipping jumped 5.4 per cent on news it would pay US$6.3 billion for Orient Overseas International Ltd, creating a global shipping titan. Orient soared 20 per cent.

Singapore added 0.5 per cent and Seoul gained 0.1 per cent. But Shanghai eased 0.2 per cent with traders unimpressed by data showing Chinese inflation stabilised in June after slowing for three months.

There were also losses in Taipei and Wellington.

On currency markets the greenback pushed on, having been boosted by last week's jobs numbers, which fuelled expectations the Federal Reserve will lift interest rates at least once more before year's end.

TRUMP ISOLATED

Fed boss Janet Yellen will appear this week in her twice-annual testimony to Congress, which will be pored over for clues about its rate plan as well as the winding down of a bond-buying programme put in place during the financial crisis.

The greenback was above ¥114, with the Japanese unit also weighed by expectations the country's central bank will not likely tighten monetary policy any time soon as the economy struggles to get up to speed.

"The BoJ appears left alone on easing while other major central banks are looking to exit strategies," Masakazu Satou, senior analyst at Gaitame Online, said. "The yen selling pressure is expected to continue for now due to the difference in interest rates," he told AFP.

The dollar also held most of its gains on the pound.

There was little reaction to the weekend communique from the G20, where leaders made concessions on trade and climate language to Donald Trump after a fractious gathering that saw the US leader isolated.

Dealers had been worried about the tycoon, who has embarked on a nationalist "America First" agenda that has raised eyebrows around the world. There was also little movement between powers on the North Korea crisis.

"The market was concerned that Trump may start a trade war soon. But at least he didn't mention it at the latest G20 meeting," Cutkovic said.

Oil prices rose after plunging Friday on worries about rising US supplies, with companies adding more rigs to lift output.

In early European trade London jumped 0.4 per cent, Paris gained 0.3 per cent and Frankfurt was 0.6 per cent higher.

- Key figures around 0810 GMT -

Tokyo - Nikkei 225: UP 0.8 per cent at 20,080.98 (close)

Hong Kong - Hang Seng: UP 0.6 per cent at 25,500.06 (close)

Shanghai - Composite: DOWN 0.2 per cent at 3,212.63 (close)

London - FTSE 100: UP 0.4 per cent at 7,380.58

Euro/dollar: DOWN at US$1.1402 from US$1.1403 at 2045 GMT Friday

Pound/dollar: UP at US$1.2900 from US$1.2881

Dollar/yen: UP at ¥114.20 from ¥113.91

Oil - West Texas Intermediate: UP 14 cents at US$44.37 a barrel

Oil - Brent North Sea: UP 18 cents at US$46.89

New York - DOW: UP 0.4 per cent at 21,414.34 (close)