Japan rebounds, Asia jumps on US data as trade talks begin

All eyes are on trade talks in Beijing, where American and Chinese officials are trying to resolve a trade dispute that threatens to worsen an economic slowdown and put a drag on the global economy. (Pixabay Photo)

SINGAPORE — Asian markets were broadly higher on Monday after strong U.S. jobs data lifted indexes on Wall Street. All eyes are on trade talks in Beijing, where American and Chinese officials are trying to resolve a trade dispute that threatens to worsen an economic slowdown and put a drag on the global economy.

KEEPING SCORE: Japan’s benchmark, bouncing back from steep losses last week, started the day trading over 3 per cent higher. The Nikkei 225 index gained 2.4 per cent to 20,038.97, while South Korea’s Kospi gained 1.4 per cent to 2,037.49. Australia’s S&P-ASX 200 added 1.1 per cent to 5,683.20. Hong Kong’s Hang Seng climbed 0.7 per cent to 25,814.40 and the Shanghai Composite index gained 0.6 per cent to 2,529.21. Shares rallied in Taiwan and throughout Southeast Asia.

WALL STREET: U.S. indexes soared on Friday after the Labor Department announced that employers added a better-than-expected 312,000 jobs in December. While the unemployment rate rose slightly, it was taken as a good sign that more people were looking for jobs. Gains were also supported by Federal Reserve Chairman Jerome Powell saying that the central bank will be flexible in deciding if and when it raises interest rates. The broad S&P 500 index advanced 3.4 per cent to 2,531.94. The Dow Jones Industrial Average rose 3.3 per cent to 23,433.16 and the Nasdaq composite was up 4.3 per cent at 6,738.86. The Russell 2000 index of smaller company stocks surged 3.8 per cent to 1,380.75. Around 90 per cent of the stocks on the New York Stock Exchange closed higher.

U.S.-CHINA TALKS: A U.S. delegation, led by Deputy U.S. Trade Representative Jeffrey Gerrish sat down for two days of talks with Chinese officials starting Monday. The Commerce Ministry did not give further details on who was leading Chinese negotiators or on the meeting’s agenda. No agreement was expected, but any progress on ending a dispute that has resulted in both sides imposing tariffs on billions of dollars’ of each other’s exports would be welcomed. Over the weekend, President Donald Trump told reporters at the White House that negotiations were going “very well” and investors are keen to see what comes next. Last month, Trump and Chinese leader Xi Jinping agreed to hold off on further tariffs for 90 days, to resolve a range of issues stemming from Beijing’s technology policy.

ANALYST’S TAKE: “The potential of movement on China-U.S. trade means a moderation of extreme bearishness around the outlook for global growth,” Michael McCarthy, chief market strategist at CMC Markets in Sydney, said in an interview. “Stronger U.S. jobs and wage data on Friday night are key fundamental contributors to the rally,” he added.

ENERGY: U.S. crude oil added 74 cents to $48.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract added 1.8 per cent to $47.96 a barrel on Friday. Brent crude, used to price international oils, rose 75 cents to $57.81 per barrel. It gained 2 per cent to $57.06 per barrel in London.

CURRENCIES: The dollar weakened to 108.22 yen from 108.52 yen late Friday. The euro rose to $1.1427 from $1.1362.