Asian Shares Firm After Solid U.S. Jobs Data, Dollar Soft

Asian share prices held firm on Monday after solid U.S. payroll data underpinned investor risk sentiment, while last week’s dovish comments from Federal Reserve Chair Janet Yellen kept the U.S. dollar in check.

Oil prices showed signs of fatigue after last quarter’s rebound, extending their decline on Friday following comments from a powerful Saudi prince that raised doubts about the chance of any output freeze deal later this month.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent, although the many of its component parts were not traded because of a market holiday in Greater China.

Japan’s Nikkei fell 0.3 percent, led by fall in automakers following poor U.S. sales figures.

European shares were expected to rise, with Germany’s DAX seen rising by up to 0.4 percent, France’s CAC 0.3 percent and Britain’s FTSE 0.1 percent.

U.S. stocks rose on Friday, with the S&P 500 gaining 0.63 percent to a three-month high, after better-than-expected U.S. jobs and factory numbers.

Nonfarm payrolls increased 215,000 in March, beating expectations, while average hourly earnings rose seven cents, recovering from a slip in February.

The unemployment rate rose to 5.0 percent from an eight-year low of 4.9 percent, though that was due to more people seeking work, a sign of more confidence in the jobs market.

Manufacturing data from the U.S. and China also eased concerns about slump in the global manufacturing activity.

Yet the cautious rate-hike view expressed by Fed Chair Janet Yellen last week resonated among investors, limiting expectations of a near-term rate hike by the Fed.

“U.S. labor markets are firm, with the pool of labor expanding, but pressure on wages is hardly rising. We have been seeing this for a long time and unless it changes, markets will focus more on Yellen’s stance,” said Koichi Yoshikawa, executive director of financial markets at Standard Chartered Bank.

Two-year Treasury yield was 0.744 percent, not far from a one-month low of 0.725 percent touched on Thursday while the 10-year U.S. Treasury yield dipped to 1.753 percent , hitting a one-month low.

“The fall in oil prices is making it easier for investors to buy bonds. Japanese investors’ buying in foreign bonds is also helping to depress U.S. long-date bond yields,” said a derivatives trader at a Japanese brokerage.

Low U.S. yields undermined the U.S. dollar in the currency market.

The euro was at $1.1391, not far from its 5½-month high of $1.1438 touched on Friday.

It has not shown any reaction so far to new tensions among Greece and its lenders over a leaked transcript suggesting that IMF staff may threaten to leave the bailout to force European lenders to offer more debt relief.

Against the yen, the dollar fell to 111.43 yen, having dropped to a two-week low of 111.32 early on Monday. The dollar was also weaker against a number of currencies in emerging markets.

Hedge funds are buying back emerging currencies they had sold heavily last year. The Malaysian ringgit rose to eight-month high while the Indian rupee stood near a three-month high.

The Brazilian real stood at a seven-month high, while the South African rand was at a four-month high as the presidents of both countries face possible impeachment for alleged misconduct, strengthening perceptions that due process is still intact.

Oil markets are losing momentum after their recovery from mid-February to March as doubts return over the ability of big oil producing countries to agree an output freeze when they meet on April 17.

Saudi Deputy Crown Prince Mohammed bin Salman said on Thursday that OPEC’s traditional swing producer will not join the output freeze without the participation of Iran and other major exporters, Bloomberg reported.

Iran has maintained that it will not participate in any freeze until its oil exports return to pre-sanctions levels.

Adding to concerns of a global glut which has pulled down prices by as much as 70 percent since 2014, U.S. production has remained high despite steep cuts in drilling for new reserves as well as a jump in oil sector bankruptcies.

Brent crude futures fell to as low as $38.19 per barrel, its lowest in a month, on Monday and last stood at $38.34 per barrel, down 0.9 percent.

U.S. crude futures dropped 1.3 percent to $36.33, hovering near their lowest level in three weeks.

Copper, seen as a gauge of the global economic strength because of its extensive industrial use, also dropped to one-month low of $4,791.50 a ton.