BEIJING -- Asian stocks followed Wall Street higher on Monday after strong U.S. hiring data coupled with scant wage gains suggested a possible recession might be further away, but also that inflationary pressures are weakening.
Tokyo's benchmark gained almost 2%. Shanghai, Hong Kong and Seoul also rose.
Wall Street's benchmark S&P 500 index leaped 1.5% on Friday, putting it on the verge of entering what traders call a “bull market” after rising nearly 20% in seven months.
Government data on Friday showed employers hired more people than expected in May but wage gains are slowing. That suggests the economy is strong but upward pressure on inflation might be weakening, reducing the need for the Federal Reserve to cool business activity with more rate hikes.
“Markets appear poised to ride last week’s upward momentum as bubbly risk appetite finds a comfort pillow in hopes for a U.S. soft landing,” Stephen Innes of SPI Asset Management said in a report.
The Nikkei 225 in Tokyo advanced 1.9% to 32,124.17 and the Shanghai Composite Index added less than 0.1% to 3,232.80. The Hang Seng in Hong Kong gained 0.7% to 19.078.22.
The Kospi in Seoul was 0.6% higher at 2,616.25 and the S&P ASX 200 in Sydney jumped 1.2% to 7,232.10.
Singapore and Jakarta gained. Markets in New Zealand and Thailand were closed for holidays.
On Wall Street, the S&P 500 rose to 4,282.37. The Dow Jones Industrial Average rallied 2.1% to 33,762.76 and the Nasdaq composite gained 1.1% to 13,240.77.
Industrial companies, energy producers and banks rose. Exxon Mobil advanced 2.3% as prices for crude oil climbed on hopes that a resilient economy would burn more fuel.
The Labor Department’s monthly jobs report showed a slowdown in wage increases even though hiring strengthened.
While that may discourage workers who are trying to keep up with rising prices, investors believe slower wage gains will mean less upward pressure on inflation.
Unemployment also rose by more than expected last month, moving up to 3.7% from a five-decade low. That implies a bit more slack in the job market and seems to conflict with hiring data, which come from a separate survey.
Following the report, traders were largely expecting the Fed to hold interest rates steady at its next meeting in two weeks. If it does, that would be the first time it hasn’t hiked rates in more than a year.
Higher rates have also hurt many smaller and mid-sized banks, in part because customers have pulled deposits in search of higher interest at money-market funds.
Several high-profile bank failures since March have shaken the market, leading Wall Street to hunt for other possible weak links. Several under the heaviest scrutiny rallied following the jobs report. PacWest Bancorp leaped 14.1%, for example, to trim its loss for the year to 66.6%.
But Fed officials have also warned recently that a pause on rate hikes in June wouldn’t necessarily mean the end to hikes.
In energy markets, benchmark U.S. crude rose 94 cents to $72.68 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.64 on Friday to $71.74. Brent crude, the price basis for international oil trading, advanced 85 cents to $76.98 per barrel in London. It added $1.85 the previous session to $76.13.
The dollar rose to 140.07 yen from Friday's 139.94 yen. The euro fell to $1.0701 from $1.0712.