TOKYO — Asian shares advanced Monday at the start of a week of U.S. economic updates. Investors have been encouraged by easing worries over inflation, which reduces the likelihood of another rate hike by the Federal Reserve.

Japan's benchmark Nikkei 225 jumped 2.5% in morning trading to 70,037.61. The index marked its first close above 70,000 points in three months.

Australia's S&P/ASX 200 edged up 0.1% to 8,691.90. Hong Kong's Hang Seng was unchanged at 23,971.55. Trading was closed in Shanghai and South Korea for national holidays.

In Japan, Tokyo Electron gained 5.5%. SoftBank Group's shares gained 3.3%, while Taiwan Semiconductor Manufacturing Co. (TSMC) climbed 2.6%.

Last week, the S&P 500 rose 0.7% and pulled within 1% of its record set in August. The Dow Jones Industrial Average added 0.5%, and the Nasdaq composite gained 1.2%.

The U.S. government said employers added 29,000 more jobs to their payrolls than they cut last month. The net hiring rate of 29,000 was fewer than economists expected and a slowdown from August’s net hiring rate of 133,000.

The yield on the 10-year Treasury briefly dropped below 5.17%. The 10-year Treasury yield peaked near 5.35% on Thursday before bouncing back to 5.28%.

Benchmark U.S. crude lost 1.03% to $90.17 a barrel. Brent crude declined 0.58% to $101.66. Oil prices have been fluctuating during uncertainty about how the war with Iran will reshape the global oil industry.

In currency trading in Asia Monday, the U.S. dollar rose to 157.97 Japanese yen from 157.83 yen. The euro cost $1.1179, down from $1.1257.

What's New

The Federal Reserve last raised its benchmark interest rate in July 2023, marking the first increase in three years as part of its efforts to combat inflation. The Nikkei 225 closed above 70,000 points for the first time since July 2023, reflecting a long-term upward trend in Japanese equities despite global economic uncertainty.

The Federal Reserve conducted a series of rate hikes that led to a decline in the S&P 500, showing the impact of monetary policy on equity markets. The Federal Reserve raised its benchmark interest rate for the first time in three years in September 2026, marking a shift from its previous period of rate stability. The Federal Reserve's dot plot from the September 2026 meeting indicated that a majority of policymakers expected at least one additional rate hike in 2026, but this expectation decreased after the September jobs data was released.

Why It Matters

The movement in Asian shares reflects investor sensitivity to U.S. economic data and Federal Reserve policy signals. The slowdown in U.S. job growth to 29,000 from 133,000 in August has reduced expectations for further rate hikes, influencing global equity and bond markets. Historical patterns show the Nikkei 225 often rises when U.S. labor data suggests reduced inflationary pressure.

The 10-year Treasury yield hitting a 24-year high of 5.35% in August 2026 reflected market concerns about prolonged tight monetary policy. However, the subsequent drop in yield expectations following weaker jobs data illustrates how labor metrics directly impact financial conditions. In the past five years, the Nikkei 225 has shown a tendency to gain when U.S. nonfarm payrolls fall below a certain threshold, suggesting a correlation between weak labor data and stock market performance.