TOKYO: Japanese stocks rallied after a strong U.S. jobs report reinforced confidence in the world’s largest economy and sent the dollar higher against the yen.
The Topix index climbed 1.2 percent to 1,592.72 as of 12:32 p.m. in Tokyo, after sliding 1.3 percent last week. Exporters from Honda Motor Co. to Kubota Corp. advanced, while energy explorers slipped after OPEC opted not to impose a limit on output. The Nikkei 225 Stock Average added 1.5 percent to 19,792.50. The yen traded at 123.29 per dollar after weakening 0.4 percent on Friday as U.S. non-farm payrolls increased more than economists had expected in November, driving U.S. equities higher.
“The biggest takeaway from these payroll figures is that the U.S. economy is strong enough to withstand higher interest rates. For Japanese companies, brisk activity in the American economy is naturally a plus,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management Co. in Tokyo. “Stocks are in a good place right now as the pace of rate hiking is expected to be gradual and long-term interest rates aren’t expected to go up much.”
The 211,000 increase in November payrolls compared with economist projections of 200,000, and followed a 298,000 gain a month earlier that was bigger than previously estimated. The Standard & Poor’s 500 Index jumped the most in almost three months on Friday. Traders are pricing in 74 percent odds for a Federal Reserve rate increase next week, while only five of the 73 economists surveyed by Bloomberg see rates left on hold at the Dec. 15-16 meeting.
