Related to this topicMarkets Intelligence Council

Nikkei Jumps 2.5% on Weak Jobs Data and Bets the Fed Won't Hike

  • Nikkei 225 jumped about 2.5% as weak U.S. jobs data dented Fed hike bets.
  • October Fed hike odds fell below 25% after September hiring slowed to 29,000.
  • Can bond yields and oil prices keep supporting the rally?
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The Nikkei 225 jumped about 2.5% on Monday as weak jobs data pushed October Fed hike bets below 25%.

The relief has limits, though. The 10-year Treasury yield sits near 5.25%, close to a two-decade high, after the Fed’s first rate hike in three years.

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Does Weak Jobs Data Change the Fed Outlook?

September’s net hiring of 29,000 undershot forecasts and sat far below August’s 133,000, according to AP.

Wage growth also slowed, Investing.com reported, and money markets now price in less than a 25% chance of an October hike.

U.S. stocks rallied on the report Friday. The Nasdaq composite climbed 1.2%, and the S&P 500 ended 0.7% higher, less than 1% shy of August’s record.

Friday also brought a record close for the Nasdaq 100, though its futures edged down 0.1% in Asian trading.

In Tokyo, the Nikkei briefly cleared 70,000 earlier in the session, a level it had not reached in three months, AP reported.

Nikkei has been on the rise and spiked on Monday. Image Source: Trading View

Meanwhile, mainland Chinese and South Korean markets were shut for public holidays, while Hong Kong’s Hang Seng sat near 23,976.

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Can Bonds and Oil Sustain the Chip Rally?

In afternoon trading, Tokyo Electron, a chipmaking equipment supplier, rose 5.2% and SoftBank Group, a technology investor, gained 3.1%.

Taiwan Semiconductor Manufacturing Co. (TSMC) rose about 3% on reports of talks with Terafab, Elon Musk’s planned Texas chip venture.

Culpium, a newsletter by journalist Tim Culpan, broke the story, and Musk has confirmed talks without announcing a deal.

However, Wall Street’s gains narrowed Friday as the 10-year Treasury yield recovered to 5.28% from an intraday low below 5.17%. Thursday’s peak near 5.35% brought longer-term yields close to two-decade highs.

Investing.com tied the selloff partly to heavier corporate borrowing for AI projects.

Brent crude traded near $101 a barrel after briefly topping $103 on a Saudi-backed push against Yemen’s Iran-aligned Houthis.

Still, one soft report has not cleared the risks. Investing.com cited long-term yields, European bond-market worries, and geopolitical threats as sources of renewed volatility.

That leaves the rally exposed to a bond market still digesting heavier AI-related corporate borrowing.

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