Asian shares are higher as easing worries over inflation reduce odds for another Fed rate hike

TOKYO (AP) — Asian shares advanced Monday at the start of a busy week for U.S. economic updates.

Investors have been encouraged by easing worries over inflation, which reduces the likelihood of another rate hike by the Federal Reserve.

Japan's benchmark Nikkei 225 jumped 2.5% in morning trading to 70,037.61. It was the benchmark's first foray above 70,000 points in three months.

Australia's S&P/ASX 200 edged up 0.1% to 8,691.90. Hong Kong's Hang Seng was unchanged at 23,971.55.

Trading was closed in Shanghai and South Korea for national holidays.

Interest in shares related to artificial intelligence drew buying interest. In Japan, Tokyo Electron gained 5.5% and technology investment giant SoftBank Group's shares gained 3.3%.

Taiwan Semiconductor Manufacturing Co., or TSMC, climbed 2.6%.

Last week, U.S. stocks finished near an all-time high after the latest update on the U.S. job market helped to alleviate worries about higher inflation.

The S&P 500 rose 0.7% and pulled within 1% of its record set in August . The Dow Jones Industrial Average added 0.5%, and the Nasdaq composite gained 1.2%.

The U.S. government said employers across the country added 29,000 more jobs to their payrolls than they cut last month. That was fewer than economists expected and a slowdown from August’s net hiring rate of 133,000.

Markets took that to mean the Federal Reserve will be less likely to raise its benchmark rate. The Federal Reserve recently raised its main interest rate for the first time in three years to try to rein in the painful increases for the cost of living.

The pullback in expectations for an October rate hike helped calm the bond market.

The yield on the 10-year Treasury briefly dropped all the way below 5.17%. That was down from its peak near 5.35% on Thursday, when it and other longer-term yields neared their highest levels in two decades.

The 10-year Treasury yield bounced back to 5.28%, more than 0.10 percentage points above its bottom for the day. That in turn helped U.S. stocks pare their own gains.

In energy trading, benchmark U.S. crude lost 1.03% to $90.17 a barrel. Brent crude, the international standard, inched down 0.58% to $101.66.

Oil prices have been yo-yoing lately amid uncertainty about how the war with Iran will reshape the global oil industry.

In currency trading in Asia Monday, the U.S. dollar rose to 157.97 Japanese yen from 157.83 yen. The euro cost $1.1179, down from $1.1257.

Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama