Asian stock markets saw an upsurge in trading, reaching a high point driven by the anticipation that the Federal Reserve would likely decrease interest rates, leading to the weakening of the yen after a recent substantial strengthening. Markets in Asia, particularly China, started the week on a positive note following holidays, with the MSCI's Asia-Pacific shares index hitting its peak since February 2023 and China's blue-chip index seeing a significant increase.
China's stock market experienced strong gains last week, while its mainland markets were closed for the Labour Day holiday, with Hong Kong's Hang Seng Index also displaying positive performance. The Chinese market's rebound was attributed to a supportive fiscal policy announced after the Politburo meeting, focusing on boosting the economy through monetary and fiscal measures.
As the broader market rally continued across Asia, boosted by the U.S. nonfarm payrolls report, expectations of Fed rate cuts grew stronger, particularly after Chair Jerome Powell reiterated the central bank's easing bias. The dollar remained stable, with European stock futures seeing gains while traders kept a close eye on the yen's volatility, impacted by suspected interventions from Japanese authorities to stabilize the currency's value.