Asian Stocks Surge as U.S. Job Market Defies Recession Fears

Asian stocks saw a significant rally after robust U.S. labor market data allayed recession fears. The U.S. dollar strengthened against the yen, and Treasury yields reached highs. Crude oil prices and gold dipped amid Middle East tensions. Bets for a U.S. rate cut receded post-payroll report.

On Monday, Asian stocks experienced a notable rally while the U.S. dollar climbed to a fresh seven-week high against the yen. This surge came after U.S. labor market data alleviated recession concerns and sharply adjusted interest rate expectations. U.S. Treasury yields rose to two-month highs following the release of the non-farm payrolls report, which showed an unexpected increase in jobs in September, the most in six months.

Despite ongoing conflict in the Middle East, with Israel targeting locations in Lebanon and Gaza, crude oil prices dropped from their month-long peak. Japan's Nikkei index led regional equity gains, surging 2.28%, bolstered by a weaker yen. Other indices in Hong Kong, Australia, and South Korea also saw notable rises as mainland Chinese markets remained closed for Golden Week.

The U.S. dollar exhibited strength, trading as high as 149.10 yen. Meanwhile, attention is focused on the Federal Reserve's next policy announcement, where expectations for a large rate cut diminished. Analysts observed a return to confidence in U.S. economic performance and its global impact on equities, while regional bond and commodity markets reacted to these shifts in economic sentiment.

(With inputs from agencies.)