A person walks by a screen outside a Tokyo bank showing stock indexes from different countries, as captured by Reuters.
Asian markets opened the week on a positive note, with gains driven by Chinese manufacturing growth and a tech stock rally. Meanwhile, the euro faltered as political unrest in France added to concerns. Investors are also keeping a close watch on U.S. interest rate decisions and global monetary policy shifts.
In Asia, Chinese shares rose following a robust private manufacturing report that echoed official data showing modest growth. Hong Kong’s Hang Seng edged up 0.16%, mainland China’s blue chips gained 0.6%, and Japan’s Nikkei climbed 0.8%. Tech stocks saw significant gains across the region, with Taiwan's market surging over 2% and South Korea's KOSPI adding 0.38%.
U.S. markets also played a role in bolstering Asian stocks. The S&P 500 and Nasdaq hit record highs last Friday, providing momentum for the tech rally. However, Japanese government bond yields hit a 16-year high after Bank of Japan Governor Kazuo Ueda hinted at a potential rate hike, signalling economic resilience.
On the currency front, the U.S. dollar gained strength, supported by expectations of Federal Reserve action. The euro, however, slid 0.53% to $1.0520 amid fears of a political crisis in France. French Prime Minister Michel Barnier faces a Monday deadline to adjust his budget or risk a no-confidence vote, threatening the stability of his government. The turmoil has also weighed on European bonds and stocks, with indicators pointing to a lower market open.
The Federal Reserve remains in the spotlight as Friday’s payroll report will guide its next rate decision. With a 66% chance of a quarter-point cut, traders are closely watching speeches by key Fed officials, including Chair Jerome Powell, to gauge future policy directions.
Gold prices dipped 1%, reflecting the dollar’s strength, while oil prices climbed on positive Chinese data and geopolitical tensions in the Middle East. Brent Crude rose to $72.23 a barrel, and U.S. West Texas Intermediate reached $68.37.
In cryptocurrencies, ether hit a six-month high of $3,762.20 before settling at $3,674.44, while bitcoin hovered near its record high at $96,434.
