Japanese stocks see biggest gain this year, leading sharp Asia rebound
By Lisa Twaronite
The upbeat U.S. data has brought some calm to markets after a week of turbulence as signs of softening global growth roiled investors and sent volatility spiking.
Still, Okazawa said, much of the rise in Asian shares was due to funds reducing their downside hedges, so he called Monday's broad gains a "mostly technical rebound."
On Wall Street, all major stock indexes climbed more than 1 percent on Friday, though the S&P 500 posted its fourth straight weekly decline, its longest streak in more than three years.
U.S. earnings will remain in the spotlight this week, with results due from 128 S&P 500 companies, including six Dow components.
Out of the 81 S&P 500 component companies that have already reported third-quarter results, 64.2 percent have beaten expectations, a rate slightly below the average over the past four quarters but better than the past 20 years.
But some strategists remain wary as the negative factors which dragged down global shares last week have not completely evaporated.
"With Halloween just around the corner, the market was spooked by 'ghosts' and these ghosts will probably stick around longer," said Hiroyuki Nakai, chief strategist at Tokai Tokyo Research Center. "The ghosts are European economic concerns, worries on what could happen after the Fed ends tapering, and fears about Ebola."
Asian investors are also paying attention to developments in Hong Kong, where pro-democracy protests entered their fourth week and demonstrators appeared increasingly willing to confront police.
U.S. Treasuries posted their second straight day of declines on Friday, and their rising yields added to the dollar's appeal.
The yield on benchmark 10-year notes stood at 2.221 percent in Asian trade, up from Friday's U.S. close of 2.199 percent and well away from 17-month lows below 2 percent plumbed last week.
The value of the dollar's net long position increased to $43.04 billion from $40.91 billion the previous week. Net dollar-long positions notched their fourth straight week of rises, and totalled at least $30 billion for the ninth straight week.
The euro was slightly lower at $1.2754, while the dollar added about 0.4 percent against the yen to 107.29 yen.
The yen's drop to a six-year low against the dollar of 110.09 on Oct. 1 followed a rapid decline of 8 percent over three months, and sparked fears at some Japanese companies. Nearly half of Japanese firms think the government should start defending the yen at this month's dollar high of 110, according to a Reuters survey released on Monday.
In commodities trading, Brent crude rose about 0.1 percent on the day to $86.22 a barrel, bouncing from last week's nearly four-year lows as investors bought back into a market they said was oversold. U.S. crude rose about 0.5 percent to $83.11 after logging its third weekly decline.
Spot gold inched down about 0.1 percent to $1,236.06 an ounce, after marking its second straight weekly gain.
(1 US dollar = 6.1230 Chinese yuan)