Asia up after dismal U.S. jobs data, dollar pressured

By Lisa Twaronite

TOKYO (Reuters) – Asian shares rose and the dollar steadied but remained under pressure on Monday, after a dismal U.S. jobs report led investors to pare bets the U.S. Federal Reserve would hike interest rates anytime soon.

Major European markets were closed from Friday to Monday for the Easter holiday, reopening on Tuesday.

Labor Department data showed U.S. employers added the fewest jobs in more than a year in March. The rise of 126,000 jobs was well below expectations for a gain of 245,000 forecast by a Reuters poll of economists.

MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> rose 0.7 percent to push to its highest levels since September 2014. Japan’s Nikkei stock average <.N225> slumped 0.3 percent, though it pared earlier sharp losses as the yen gave up gains against the dollar.

U.S. stock markets were closed on Friday for the Easter holiday, but U.S. stock futures fell after the jobs data, suggesting a lower open on Wall Street later on Monday. U.S. S&P e-mini equity futures were thinly traded in Asian time, and were down 0.7 percent after shedding 1 percent on Friday.

The yield on benchmark 10-year Treasury notes, which moves inversely to prices, hit nearly two-month lows of 1.8 percent on Friday, and stood at 1.829 percent in Asian trading, keeping pressure on the greenback.

“The dollar will likely remain pressured for some time on easing expectations for the Federal Reserve’s rate hike in June,” said Park Yu-na, an analyst at Dongbu Securities, after the South Korean won climbed to a two-month high against the U.S. currency.

The dollar index, which tracks the U.S. currency against a basket of six major rivals, edged up 0.2 percent to 96.727 <.DXY>.

Data from the Commodity Futures Trading Commission released on Friday showed that investors reduced their upside bets on the U.S. dollar in the latest week ended March 31, while net shorts on the euro hit another record high.

The euro climbed about 0.1 percent on the day to $ 1.0981, moving well away from a 12-year trough of $ 1.0457 plumbed on March 16. The euro suffered the worst quarter in its 15-year history, shedding 11 percent against the dollar on divergent monetary policy expectations between the Fed and the European Central Bank, as well as investors’ fears about Greece’s finances.

Against its Japanese counterpart, the dollar edged up about 0.1 percent on the day to 119.05 yen.

“We still see the dollar trending higher in the longer term. The jobs data headline was certainly soft, but we have to consider that jobs had been roughly growing at a pace of 200,000 a month for a year. The rise in earnings was also a plus,” said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

“Indicators like housing-related data, consumer confidence and initial jobless claims paint a brighter picture and the April non-farm payrolls could give an upside surprise. It helps explain why dollar reaction is confined to a 1-yen range so far,” he said.

The Australian dollar inched down 0.1 percent to $ 0.7626, moving back toward Thursday’s six-year trough of $ 0.7534 amid expectations for an interest rate cut by the Reserve Bank of Australia later this week.

Crude oil futures rallied after Saudi Arabia raised prices for sales to Asia, taking back some of their sharp losses marked before the holiday weekend after Thursday’s preliminary pact between Iran and global powers on Tehran’s nuclear program.

Brent added 1.3 percent to $ 55.65 a barrel, while U.S. crude futures rose 1.8 percent to $ 50.02 a barrel, as investors bet that Iran’s framework deal offered little chance for any significant increase in exports until 2016.

Spot gold rose 0.6 percent at $ 1,217.06 an ounce, lifted by the downbeat U.S. jobs report.

(Additional reporting by Yeawon Choi in Seoul and Shinichi Saoshiro in Tokyo; Editing by Eric Meijer)