Tokyo was among the worst-hit, while Hong Kong, Shanghai, Sydney, Seoul, Taipei and Wellington were also down
Asian markets dropped Monday after another batch of worse-than-expected US jobs data revived fears about a possible recession in the economy.
The big miss in the August non-farm payrolls figures was compounded by heavily revised down figures for the previous two months and ramped up bets on a Fed interest rate cut next week.
The highly anticipated report Friday showed an estimated 142,000 jobs were created in the US last month, up on July but well off forecasts.
Traders have been on edge since the July figures, which helped trigger a market rut on speculation that the Federal Reserve may have waited too long to lower borrowing costs as it focused on bringing inflation down.
After last month’s result, some analysts pointed to the “Sahm Rule,” which says an economy is in the early stages of recession if the three-month moving average of unemployment is 0.5 percentage points above its low over the prior 12 months.
Wall Street’s three main indexes retreated Friday on the latest news and pushed the dollar down against its main peers.
With the central bank set to decide next week, debate is centred on whether it will lower rates by 25 or 50 bps.
The report did not suggest a severe downturn is imminent, but the softness in the numbers certainly point to an increase in the probability a recession could be on the cards, according to National Australia Bank’s Rodrigo Catril.
The Fed may just cut by 25 bps in September, but it will keep its options open for bigger cuts in November and or December, depending on how the data evolves from here, he added.
After the report was released, Fed governor Christopher Waller said he was open minded about how big a cut to make but that officials needed to act.
The current batch of data no longer requires patience, it requires action, he cautioned, while adding that he did not think the economy was in recession or headed for one.
In early Asian trade, Tokyo was among the worst-hit as a stronger yen weighed on exporters, while Hong Kong, Shanghai, Sydney, Seoul, Taipei and Wellington were also down.
