Tokyo — Asian shares rose to their highest level in two-and-a-half-weeks on Monday as strong US jobs data offset concern that tariff wars between the US and the rest of the world could drag on global economic growth.
MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1% to a high last seen on May 17, while Japan’s Nikkei rose 1.3%.
Tech names such as Tencent and Taiwan Semiconductor Manufacturing were among the biggest gainers.
On Wall Street on Friday, US tech shares soared, pushing the Nasdaq composite up 1.51% to 7,554, near its record closing high of 7,588 marked in March.
In contrast, the S&P 500, which rose 1.08% on Friday, was still about 140 points off its record peak of 2,872 set in January as concern about trade friction curtailed many other shares.
Finance leaders of the closest US allies vented anger over the Trump administration’s metal import tariffs on Saturday, setting up a heated fight at a Group of Seven (G7) summit next week in Quebec.
In a rare show of division among the normally harmonious club of wealthy nations, the six other G7 member countries issued a statement asking US Treasury Secretary Steven Mnuchin to convey their “unanimous concern and disappointment” about the tariffs to President Donald Trump.
“The G7 is showing more divisions than unity, to the point where one has to wonder whether it is worth holding meetings,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
“The G7 summit this weekend could be equally terrible. There’s even talk that Trump may not go. Concern about trade friction is likely to continue to weigh on markets,” he said.
Still, the US economy is undeniably in strong shape at the moment, keeping bears at bay.
Friday’s government data showed US job growth accelerated in May and the unemployment rate dropped to an 18-year low of 3.8%, pointing to rapidly tightening labour market conditions, which could stir concerns about inflation.
“We had strong headline figures on employment but rise in wages was still well-contained and did not point to a sharp acceleration in inflation,” Hirokazu Kabeya, chief global strategist at Daiwa Securities.
Average hourly earnings rose 8c or 0.3% last month after edging up 0.1% in April. That pushed the annual increase in average hourly earnings to 2.7% from 2.6% in April.
The strong employment report added to a string of upbeat economic data, including consumer spending, industrial production and construction spending.
They have suggested economic growth was regaining speed early in the second quarter after expanding at a moderate 2.2% annualised rate in the January-March period.
Given the strength, the Federal Reserve is all but certain to raise interest rates at its policy meeting next week.
That supported the dollar against other currencies.
The US currency traded at ¥109.50, having gained 0.6% on Friday, extending its rebound from Tuesday’s low of ¥108.115, which was its lowest level in more than five weeks.
The euro traded at $1.1665, off Thursday’s high of $1.1725. Still, it kept some distance from Tuesday’s 10-month low of $1.1510 as concern over Italy’s political crisis has eased.
US crude futures fell to as low as $65.51 a barrel on Friday, touching their lowest level in almost two months as growing US crude production and a glut trapped inland due to a lack of pipeline capacity have pressured their prices.
They last traded at $65.80, flat from Friday close.