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Asian Markets Fall as Strong U.S. Jobs Report Dampens Rate Cut Expectations

Published 07/07/2019, 10:17 PM
Updated 07/07/2019, 10:19 PM
© Reuters.

Investing.com - Asian stocks fell in morning trade on Monday after a strong U.S. jobs report released late last week casted doubt on the pace of interest rate cuts.

China’s Shanghai Composite and the Shenzhen Component slumped 3.0% and 2.3% respectively by 10:21 PM ET (02:21 GMT).

Hong Kong’s Hang Seng Index was down 2.0% following another protest on Sunday against a proposed extradition bill that would have allowed some arrested in the city to be sent for trial in mainland China.

It was reported that hundreds of thousands of Hong Kong citizens were on the street last month to attend protests over the bill.

Japan’s Nikkei 225 dropped 1.1% after the Cabinet Office showed that the country’s core orders fell 7.8% in May from the previous month.

The reading compared with an expected decline of 4.7% and followed a 5.2% rise in April.

Bank of Japan (BOJ) Governor Haruhiko Kuroda said he expects the country's economy to grow moderately and gradually push inflation toward the central bank's 2% target.

"The BOJ will make necessary policy adjustments to sustain the economy's momentum towards achieving its inflation target," Kuroda said in a speech on Monday.

South Korea’s KOSPI was down 2.0%. Reports that Japan imposed restrictions last week on South Korean exports of products needed to make semiconductors and computer displays received some focus.

Down under, Australia’s ASX 200 traded 1.1% lower. Shares of major miners underperformed after Reuters reported that a group of Chinese steelmakers urged the government to investigate whether “non-market factors” are causing a record surge in iron ore prices.

Rio Tinto (LON:RIO) dropped 1.5% and BHP Billiton (LON:BHPB) fell 1.3% in morning trade.

Last Friday, the U.S. jobs report showed the economy stateside adding 224,000 jobs in June, well above the forecast number of 165,000 jobs

Investors will now turn their focus to upcoming testimony from the Federal Reserve chairman Jerome Powell on Wednesday and Thursday for more hints on the direction of future monetary policies.

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