Tokyo stands out as Asian markets rally
TOKYO led a surge in Asian stock markets yesterday as a strongerthan-forecast jump in US jobs provided some much-needed optimism after the hammering caused by Britain’s vote to leave the European Union.
Last week’s data showing the world’s biggest economy saw a surge in new posts last month lit a fire under US and European shares, which were also boosted by hopes for fresh central bank stimulus.
The Labor Department said 287,000 jobs were created in June, 112,000 more than expected and a sharp improvement on May’s 11,000 that had raised fears of a potential recession.
The news saw all three main indexes on Wall Street surge, while European markets also rallied.
Tokyo’s Nikkei was the standout performer in Asia yesterday, with a landslide victory for Prime Minister Shinzo Abe’s ruling party providing extra support.
The victory fuelled speculation for a fresh round of stimulus, reportedly worth as much as 20 trillion yen (US$120 billion), to kickstart the stumbling economy.
Nintendo was the star, soaring more than 20 percent on news that its smartphone game Pokémon Go debuted at the top of the gaming charts. The gains built on a 9pc rise on July 8.
The Japanese market ended 4.0pc higher.
“Investors are basically welcoming the victory of Mr Abe’s ruling coalition,” said Daisuke Uno, chief market strategist of Sumitomo Mitsui Banking.
“But the question is whether or not stock prices can keep up this pace.”
The positive mood fanned buying throughout Asia, which suffered sharp losses last week on worries about the impact of Britain’s shock June 23 decision to break away from the EU.
Hong Kong rose 1.5pc, Shanghai added 0.2pc and Seoul gained 1.3pc.
Sydney jumped 2.0pc after the ruling conservative party won last week’s general election, bringing an end to uncertainty that had put the country’s AAA sovereign rating at risk.
The upbeat start to the week also saw high-yielding currencies rise, with the South Korean won up more than 1pc against the dollar, Indonesia’s rupiah 0.6pc higher and Malaysia’s ringgit also rising more than 1pc.
However, the dollar struggled to break out against the yen, sitting at 100.76 yen in early trade. The pound bought $1.2933, sitting around 31-year lows as the vote to leave the EU raises questions about the outlook for the British economy. –
People walk in front of a stock quotation board in the window of a security company in Tokyo on July 11.