Asian stocks rise, Japanese stocks lead on strong data

The Nikkei 225 and TOPIX indexes added 1.5% and 1.1%, the Shanghai Composite and Hang Seng added nearly 0.2% each, Nifty 50 index added 0.3%, while KOSPI advanced 0.1%

Most Asian stocks rose on Monday after soft U.S. payrolls data ramped up bets on a September interest rate cut, with Japanese stocks leading gains on strong economic growth data, even after Prime Minister Shigeru Ishiba unexpectedly resigned.

S&P 500 Futures gained 0.2% in Asian trade, recovering from a negative Friday close on Wall Street after the nonfarm payrolls data also sparked concerns over slowing U.S. economic growth.

But markets remained largely optimistic that the U.S. central bank will reduce interest rates by at least 25 bps during its September 16-17 meeting. Focus this week is also on U.S. consumer inflation data.

The Nikkei 225 and TOPIX indexes added 1.5% and 1.1%, respectively, coming close to record highs last seen in mid-August.

Revised second-quarter GDP showed the Japanese economy grew much faster than initially estimated, amid strong exports and private spending.

Growing doubts over more interest rate hikes by the BoJ also boosted Japanese shares, especially as the country faces heightened political uncertainty.

Prime Minister Ishiba said on Sunday that he will step down as the leader of the Liberal Democratic Party, just weeks after its ruling coalition suffered a crushing defeat in the upper house elections.

Ishiba signalled that his resignation was also after Tokyo had secured a trade deal with the U.S., which will entail relatively lower tariffs on Japanese goods.

Shanghai Shenzhen CSI 300 dropped slightly, while the Shanghai Composite and Hang Seng added nearly 0.2% each.

Broader Asian markets were mostly upbeat as Friday’s U.S. payrolls data sparked bets that a Fed rate cut was imminent. But concerns over a cooling U.S. economy kept gains limited.

Nifty 50 index added 0.3% in early trade, although the index was nursing losses from the prior week.

KOSPI advanced 0.1%, as did Straits Times index.

ASX 200 lagged as concerns over slowing economic growth pushed investors out of economically sensitive sectors such as miners and financials.