Asian shares rise, weak US jobs data fuel stimulus hopes

PHOTO: Asian shares rise, weak US jobs data fuel stimulus hopes

HONG KONG - Asian markets climbed Wednesday and the dollar sat around a two-year low against the euro after a weak US jobs report fuelled hopes the Federal Reserve will keep its stimulus programme in place.

The September report out of Washington showed the economy struggling to add jobs even before a two-week government shutdown this month that analysts say probably smothered hiring even more.

Tokyo rose 0.18 per cent by the break, Hong Kong added 0.75 per cent, Sydney was up 0.34 per cent, Seoul was flat and Shanghai gained 0.66 per cent.

The Labor Department said on Tuesday that the world's number one economy added 148,000 jobs last month, well below forecasts for a gain of 180,000.

While the figures indicate a US recovery is still having trouble gaining traction, traders took it as a cue to buy as the Fed has said it will only reel in its US$85 billion (S$105 billion) a month bond-buying scheme when the economy is strong enough.

"The limited job gain supports the view that the Federal Reserve will maintain its accommodative monetary policy stance into 2014," said Nick Bennenbroek of Wells Fargo Securities.

On Wall Street the Dow rose 0.49 per cent, the S&P 500 - already at a record high - tacked on 0.57 per cent and the Nasdaq climbed 0.24 per cent.

Global markets - particularly in emerging economies - have been in turmoil since May when Fed boss Ben Bernanke indicated the stimulus, which provides cheap cash and fuelled an investment splurge, could be withdrawn soon.

However, recent weak numbers have forced the bank to put off any "tapering", while investors say the Washington debt ceiling row and government shutdown has made any such move this year even more unlikely.

The likelihood of a cut in bond purchases in the near future had already been lowered after US President Barack Obama nominated fiscal dove Janet Yellen - a fan of the "quantitative easing" scheme - to take over Bernanke's position in the new year.

Expectations the Fed will continue to print vast sums of cash well into 2014 put further downward pressure on the dollar.

In Tokyo the euro bought $1.3789, up from $1.3780 late Tuesday in New York, where it peaked at $1.3792, its highest level since November 2011. The single currency also sat at 135.20 yen compared with 135.23 yen.

The dollar was changing hands at 98.05 yen, from 98.12 in New York late Tuesday.

In oil trade, New York's main contract, West Texas Intermediate for delivery in December, eased 16 cents to $98.14, while Brent North Sea crude for December dipped three cents to $109.94.

Gold rose to $1,340.72 at 0230 GMT compared with $1,310.44 on Tuesday - with the weaker greenback making the dollar-priced precious gold more attractive.