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

Asian markets experienced a surge on Monday as weaker U.S. job data dampened expectations for further Federal Reserve rate hikes, benefiting technology shares and alleviating pressure on bonds. Japan experienced the strongest gain, with the Nikkei 225 rising 2.5% to 69,986 and the TOPIX increasing 1.4% to 4,146.76. Hong Kong's Hang Seng and Singapore's Straits Times traded slightly higher, while South Korean and mainland Chinese markets were closed for holidays.

The Nasdaq 100 and S&P 500 both retreated from their Friday highs, reflecting a more subdued risk appetite following the U.S. jobs report, which indicated fewer job gains and slower wage growth than anticipated. This led investors to price in less than a 25% chance of an October Federal Reserve rate increase. In Japan, the Nikkei 225 led the rally, climbing 2.6%, while the TOPIX rose 1%.

Tech stocks, buoyed by optimism around potential collaborations and the broader AI trade, played a significant role in Japan's gains. TSMC saw a 3% increase following reports of a possible partnership with Elon Musk's Terafab, while Nippon Paint's share price rose 1% after it announced plans to acquire Akzo Nobel's Southeast Asian unit for $1.35 billion.

The positive momentum extended to other Asian markets, with Hong Kong's Hang Seng and Singapore's Straits Times gaining modestly. However, volatility remained a concern, as investors navigated long-term yield levels, European bond-market concerns, and geopolitical risks.