Asia equities rise but mood cautious ahead of event-packed week

Asian shares rose on Monday, taking their cue from gains on Wall Street after strong US job data, though the mood was cautious as oil prices plunged to three-and-a-half-month lows on fresh worries of oversupply. A confluence of major events this week kept many investors on edge.

TOKYO — Asian shares rose on Monday, taking their cue from gains on Wall Street after strong US job data, though the mood was cautious as oil prices plunged to three-and-a-half-month lows on fresh worries of oversupply.

A confluence of major events this week including an expected interest rate hike by the US Federal Reserve, a potentially divisive election in the Netherlands and a Group of 20 (G20) finance ministers’ meeting kept many investors on edge.

MSCI’s broadest index of Asia- Pacific shares outside Japan rose 0.90%, while Japan’s Nikkei edged 0.20% higher, led by gains in defensive shares.

European shares are expected to open down slightly, with spread- betters looking at falls of 0.10% in Germany’s DAX and EuroStoxx50.

Global stocks rose on Friday, with the MSCI’s index of 46 markets gaining 0.50%, snapping six straight days of losses after the robust US jobs report.

Solid February US jobs data also made it all but certain that the Federal Reserve will raise rates on Wednesday.

“The markets are focusing on when the Fed will raise rates next time or the pace of its rate hike, so the tone of Fed Chair Janet Yellen will be closely watched,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

US interest rate futures are pricing in about a 50% chance of another rate hike in June. By the end of 2017, a total of nearly three hikes were fully priced in, including the likely move this week.

In a Reuters poll of primary dealers, 12 out of 23 saw a rate increase to 1.00-1.25% by the June 13-14 meeting, while 10 expected such a move by the Fed’s September meeting.

The 10- year US Treasuries yield slipped a tad on Friday. Still, it last stood at 2.574%, not far from its two-year high of 2.641% touched on Dec. 15.

Global bond prices also came under pressure following a report that some European Central Bank policy makers had discussed the possibility of rate hikes before its quantitative easing ends.

The dollar slipped 0.20% to ¥114.54 from Friday’s seven-week high of ¥115.51 after Commerce Secretary Wilbur Ross said on Friday that Japan will be high on the US priority list for trade agreements. —