Asian markets mostly up after US jobs data

HONG KONG: Asian markets mostly rose on Monday and the dollar edged higher against the yen as Wall Street rallied in response to a surprisingly sharp fall in the US jobless rate.

Japanese shares enjoyed healthy gains despite the government´s downgrade of third-quarter growth, which has raised questions about the strength of a recent government spending-fuelled recovery.

Tokyo jumped 1.85 percent by the break, Hong Kong added 0.72 percent, Shanghai was flat, Seoul climbed 1.04 percent but Sydney was 0.58 percent lower.

Traders took their cue from New York, where the three main indexes posted solid gains after the Labor Department said the jobless rate dropped to a five-year low of 7.0 percent in November, from 7.3 percent in October. It also said the economy added a healthy 203,000 jobs.

The upbeat data increase the chances that the Federal Reserve will begin to wind down its stimulus programme sooner rather than later. Fears of a reduction in the Fed´s $85 billion a month bond-buying scheme -- which has been credited with fuelling an equities rally in world markets -- pushed down stocks last week.

However, analysts said there is a chance it may hold off any taper at its December meeting as the pace of jobs growth is still below the levels seen at the start of the year, while economic growth in October-December is expected to the sluggish.

They forecast that the central bank will wait to see whether the jobs figures can be sustained over another month. Some other indicators, especially inflation, have been unexpectedly soft, suggesting the economy still has important weaknesses.

The Dow surged 1.26 percent, the S&P 500 added 1.12 percent and the Nasdaq jumped 0.73 percent.

"The correction stage of the US shares prior to the employment data release is over and there is greater optimism in the market buoyed by the reaction to the strong employment figures," Mitsushige Akino, fund manager at Ichiyoshi Asset Management, told Dow Jones Newswires.

On forex markets, the greenback climbed against the yen as an end to the stimulus would mean fewer dollars sloshing around financial markets, pushing up demand.

The dollar bought 103.01 yen Monday compared with 102.85 on Friday in New York.

The euro fetched 141.22 yen, at levels not seen since October 2008, compared with 141.03 yen on Friday, while it also stood at $1.3707 against $1.3705.The euro was supported by the European Central Bank´s decision last week to hold off any new interest rate cuts despite prolonged low inflation.

Japan said Monday that economic growth in the three months to September slowed to 0.3 percent quarter on quarter, slower than the 0.5 percent initially stated and well down from the 0.9 percent in the previous three months.

While analysts tipped a pick-up in pace in October-December they remain divided over whether stimulus policies -- which stoked impressive increases earlier in the year -- will cement lasting growth.

Shares in Shanghai saw initial gains pared after November inflation eased to 3.0 percent from 3.2 percent in October and well below the government´s target for the year of 3.5 percent.

In oil trade, New York´s main contract, West Texas Intermediate for January delivery, was up 12 cents to $97.77 in morning Asian trade while Brent North Sea crude for January eased two cents to $111.59.Gold fetched $1,229.30 per ounce at 0230 GMT compared with $1,229.14 on Friday. (AFP)