By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Monday morning, with a rally in Japanese stocks with the imminent resignation of the prime minister countered by Friday’s disappointing U.S. jobs report.
Japan’s Nikkei 225 jumped 1.83% by 9:53 PM ET (1:53 AM GMT), with Prime Minister Yoshihide Suga’s planned resignation triggering hopes that his successor would better manage the country’s COVID-19 outbreak and increase spending.
South Korea’s KOSPI edged up 0.12%.
In Australia, the ASX 200 was down 0.63%, with the Reserve Bank of Australia due to hand down its policy decision on Tuesday.
Hong Kong’s Hang Seng Index gained 0.52%.
China’s Shanghai Composite was up 0.43% while the Shenzhen Component fell 0.68%, with the country releasing trade and inflation data later in the week.
Meanwhile, the People’s Bank of China also plans further regulatory tightening in the e-commerce sector, and the People’s Government of Beijing Municipality proposed an investment in ride-hailing company Didi Global Inc. (NYSE:DIDI).
Investors continue to recover from the shock of the latest U.S. jobs report. Non-farm payrolls were at 235,000, the smallest gains in seven months, while the unemployment rate was 5.2%, for August. The report could prompt the U.S. Federal Reserve to delay beginning asset tapering when it meets later in the month.
U.S. President Joe Biden could, however, make his decision on whether to re-nominate Fed Chairman Jerome Powell to a second term within the week, while Dallas Fed President Robert Kaplan will speak on Wednesday. U.S. markets are closed Monday for a holiday, thus there will be no Treasuries cash trading.
“It reinforces the delta variant impact on current economic conditions and therefore policymakers have to pivot and be agile,” K2 Asset Management head of research George Boubouras told Bloomberg.
“It reinforces that some form of stimulus will remain in the system for the foreseeable future.”
In Japan, there will be more upside with an “Abenomics variation” post-Suga, which will include more targeted fiscal stimulus and blended monetary policy, according to Boubouras.
Across the Atlantic, the European Central Bank will hand down its policy decision on Thursday.