Asian shares higher as easing worries over inflation reduce odds for another Fed rate hike

TOKYO: Asian shares advanced Monday at the start of a busy week for US economic updates.

Investors have been encouraged by easing worries over inflation, which reduces the likelihood of another rate hike by the Federal Reserve.

Japan's benchmark Nikkei 225 jumped 2.5 per cent in morning trading to 70,037.61. It was the benchmark's first foray above 70,000 points in three months.

Australia's S&P/ASX 200 edged up 0.1 per cent to 8,691.90. Hong Kong's Hang Seng was unchanged at 23,971.55.

Trading was closed in Shanghai and South Korea for national holidays.

Interest in shares related to artificial intelligence drew buying interest. In Japan, Tokyo Electron gained 5.5 per cent and technology investment giant SoftBank Group's shares gained 3.3 per cent.

Taiwan Semiconductor Manufacturing Co., or TSMC, climbed 2.6 per cent.

Last week, US stocks finished near an all-time high after the latest update on the US job market helped to alleviate worries about higher inflation.

The S&P 500 rose 0.7 per cent and pulled within 1 per cent of its record set in August. The Dow Jones Industrial Average added 0.5 per cent, and the Nasdaq composite gained 1.2 per cent.

The US government said employers across the country added 29,000 more jobs to their payrolls than they cut last month. That was fewer than economists expected and a slowdown from August's net hiring rate of 133,000.

Markets took that to mean the Federal Reserve will be less likely to raise its benchmark rate. The Federal Reserve recently raised its main interest rate for the first time in three years to try to rein in the painful increases for the cost of living.

The pullback in expectations for an October rate hike helped calm the bond market.

The yield on the 10-year Treasury briefly dropped all the way below 5.17 per cent. That was down from its peak near 5.35 per cent on Thursday, when it and other longer-term yields neared their highest levels in two decades.

The 10-year Treasury yield bounced back to 5.28 per cent, more than 0.10 percentage points above its bottom for the day. That in turn helped US stocks pare their own gains.

In energy trading, benchmark US crude lost 1.03 per cent to USD 90.17 a barrel. Brent crude, the international standard, inched down 0.58 per cent to USD 101.66.

Oil prices have been yo-yoing lately amid uncertainty about how the war with Iran will reshape the global oil industry.

In currency trading in Asia Monday, the US dollar rose to 157.97 Japanese yen from 157.83 yen. The euro cost USD 1.1179, down from USD 1.1257.