(The Herald Post) – Asian shares experienced modest gains today, while the dollar began the week on a positive note after recent US jobs data highlighted a tight labor market, reinforcing expectations that the Federal Reserve will likely raise interest rates at its upcoming meeting in May. MSCI’s broadest index of Asia-Pacific shares outside Japan saw a 0.14% increase, and Japan’s Nikkei advanced 0.5%.
Despite the holiday closure of Australian, Hong Kong, and European markets, the US jobs report’s impact on investor sentiment was evident. The Labor Department’s data revealed that nonfarm payrolls rose by 236,000 jobs last month, a figure slightly below the 239,000 anticipated by economists in a Reuters poll.
With the labor market still too tight for the Fed to lower inflation to its 2% target without additional rate hikes, investors are growing increasingly convinced that the central bank will act accordingly. Citi strategists concur, predicting that persistently strong inflation will lead to further rate hikes, with three more 25 basis point increases expected.
Meanwhile, the dollar index, which gauges the US currency against six major peers, rose 0.118% to 102.14. The euro and sterling experienced slight increases, while the yen weakened against the dollar as Japan’s new central bank governor, Kazuo Ueda, takes over from Haruhiko Kuroda.
Investor focus is now shifting toward the inflation report due on Wednesday, which will help shape the Fed’s strategy in its battle against rising prices. Additionally, the minutes from the central bank’s March meeting are set to be released on the same day.