Asian Shares Rise as Fed Bets Ease, Bonds Edge Up: Markets Wrap
(Bloomberg) — Asian stocks rose after softer US jobs data reduced pressure on the Federal Reserve to keep raising interest rates. Oil erased early gains, while bonds crept higher.
MSCI’s Asia Pacific equities index gained 1.1%, with Japan’s Nikkei 225 Stock Average rallying 2.5% as technology shares advanced. Chip bellwether Taiwan Semiconductor Manufacturing Co. jumped 3% on a potential collaboration with Elon Musk’s Terafab. Tech sentiment remained buoyant, with Nasdaq 100 futures gaining 0.4% after the underlying gauge closed at a record high Friday.
Brent crude for December delivery slipped 0.6% to about $101.60 a barrel after climbing above $103 earlier in the session as Yemen launched a bid to recapture Houthi-controlled areas. Treasuries rose modestly across the curve, with the benchmark 10-year yield down two basis points to 5.25%.
Elsewhere, a Brazilian exchange-traded fund in Japan rose 7.6% after Flávio Bolsonaro unexpectedly finished ahead of President Luiz Inácio Lula da Silva in the first round of the country’s presidential election. Futures on the real also gained.
Friday’s jobs report showed US employers added fewer workers than forecast in September and wage growth slowed, prompting money markets to price in less than a 25% chance of an October Fed hike. The reprieve for bonds came against a months-long rout fueled by persistent inflation concerns, government spending and surging corporate borrowing to finance the artificial-intelligence buildout.
“Not too hot, not too cold Goldilocks jobs data for September add to expectations that the Fed won’t rush into another rate hike this month,” Shane Oliver, chief economist and head of investment strategy at AMP Ltd., wrote in a note.
Elsewhere, gold edged up 0.5% to about $4,160 an ounce after capping its biggest weekly loss since June as higher bond yields outweighed bets on a Fed rate hold.
Benchmark US 10-year yields last week hit their highest level since 2002.
This week’s auctions of 10- and 30-year Treasuries will test investors’ demand for longer-maturity debt. The Fed will also release minutes of its September meeting on Wednesday, which may reveal policymakers’ concerns about underlying price trends and expectations.
Investors are also on the alert for signs of contagion in Europe’s government bond market after a selloff last triggered memories of the region’s debt crisis 15 years ago.
“Global bond curves steepened over the past week, and the volatility we are seeing in fixed income yields is finally gaining attention in financial markets more broadly,” Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management, wrote in a note.
“Notwithstanding this, over the past several days, market fears for back-to-back central bank rate hikes have appeared to mitigate somewhat,” he said.
Corporate Highlights:
Schneider Electric SE is nearing a deal to acquire US-based engineering software developer PTC Inc. for more than $20 billion, according to a source familiar with the matter. SoftBank Group Corp. chief Masayoshi Son — one of AI’s fervent believers — said that even he’s worried about safety risks as machines quickly gain more abilities. Nippon Paint Holdings Co. is buying Akzo Nobel NV’s decorative paints business in Southeast Asia for $1.35 billion.
Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 10:50 a.m. Tokyo time Japan’s Topix rose 1.1% Hong Kong’s Hang Seng fell 0.4% Euro Stoxx 50 futures rose 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.2% to $1.1230 The Japanese yen rose 0.2% to 157.59 per dollar The offshore yuan was little changed at 6.7077 per dollar Cryptocurrencies
Bitcoin rose 0.9% to $86,632.35 Ether rose 0.7% to $2,723.8 Bonds
The yield on 10-year Treasuries declined two basis points to 5.25% Japan’s 10-year yield declined one basis point to 3.080% Australia’s 10-year yield was little changed at 5.34% Commodities
West Texas Intermediate crude fell 1.1% to $90.14 a barrel Spot gold rose 0.4% to $4,158.78 an ounce This story was produced with the assistance of Bloomberg Automation.
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