Asian stocks rise as weak U.S. jobs data eases Fed hike bets; Japan surges

Monday’s Asian market lift traced straight back to a softer‑than‑expected U.S. jobs report that slashed the odds of another Federal Reserve rate hike. The Labor Department said September added just 29,000 jobs, far short of the 84,000 economists had forecast, and the unemployment rate nudged up to 4.2%. Money‑market pricing promptly shifted, with traders quoting "less than a 25% chance of an October Fed hike". That rapid downgrade of policy risk reignited risk‑on sentiment across the region, and investors rushed into equities, especially in Japan where the Nikkei 225 jumped 2.5% to just under 70,000 points.

The TOPIX posted a 1.4% gain, and technology stocks led the charge, buoyed by a reported tie‑up between Taiwan Semiconductor Manufacturing Co. and Elon Musk’s Terafab venture that lifted TSMC shares about 3%. In a parallel burst of corporate activity, Nippon Paint announced a $1.35 billion acquisition of Akzo Nobel’s Southeast Asian unit, sending its stock up 1%.

Even with holidays shuttering the South Korean and mainland Chinese exchanges, the MSCI Asia‑Pacific index (excluding Japan) crept higher, up 0.4% overall. Hong Kong’s Hang Seng barely budged, while Singapore’s Straits Times edged 0.3% higher. The yen inched up 0.1% to ¥157.6 per dollar, and the offshore yuan held steady at 6.71 per dollar. On the debt side, the benchmark U.S. 10‑year Treasury slipped two basis points to 5.25%, a modest retreat after a months‑long sell‑off spurred by stubborn inflation, expansive fiscal spending and heavy corporate borrowing for AI projects. The CME FedWatch tool now shows a sub‑20% probability of an October rate hike, down sharply from the 64% view a week earlier, though markets still price in a possible December increase.

Oil prices, which had briefly breached the $103 mark, gave back much of the gain, with Brent trading around $101.6 a barrel.

Treasury yields remain near multi‑decade highs—10‑year at 5.26% and 2‑year at 4.81%—pressuring equity valuations and keeping the dollar strong despite the yen’s modest gain. Treasury auctions for 10‑ and 30‑year notes on October 10 will test investor appetite for longer‑dated debt. Moreover, the Fed’s September minutes, due Wednesday, could reveal whether policymakers see the labor slowdown as a temporary blip or a sign that inflation is finally conceding ground.