By Dominic Lau
TOKYO (Reuters) – Asian shares edged away from a four-week low on Monday, while the dollar rose against the euro and yen as a surprise surge in U.S. jobs growth signalled the world’s largest economy was on a firmer footing.
U.S. employers took on 204,000 new employees last month, almost twice the number forecast by analysts and defying expectations that the partial U.S. government shutdown would hamper job growth.
The strong data raised the prospect the Federal Reserve may soon decide to start winding down its $85 billion-a-month bond-buying programme.
But Fed Chairman Ben Bernanke and two other top policymakers suggested continued support for the U.S. central bank’s massive stimulus campaign.
Adding to the positive sentiment, China’s factory output and investment data pointed to signs of stabilisation in the economy, though annual inflation climbed to an eight-month high in October, fuelling market worries about policy tightening.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1 percent after shedding 1 percent on Friday to a four-week low.
Australian shares firmed after the robust Chinese data, reflecting the countries’ strong trade. The S&P/ASX 200 index gained 0.4 percent, while the Australian dollar stabilised at $0.9373, having fallen 0.8 percent in the previous session.
The dollar was up 0.1 percent at 99.16 yen, not far from a seven-week high of 99.41 yen reached last Thursday, and up 0.1 percent at $1.3353 to the euro, having gained 0.4 percent on Friday.
Against a basket of major currencies, the dollar stood at 81.295, not far from a two-month high of 81.482 touched on Friday.
“The full suite of new data and information balances the risk more evenly for our call for Fed tapering to begin in March. Previously it seemed March was the earliest the Fed would taper owing to the weaker hiring trends,” analysts at BNP Paribas wrote in a note.
“However, neither GDP nor employment has slowed as much as we previously estimated or feared. Yet Fed speakers have emphasised the need to see an acceleration in hiring, GDP growth and inflation before it begins to taper its bond-buying programme.”
As the yen weakened, Japan’s Nikkei benchmark climbed 1.5 percent after losing 0.8 percent last week.
U.S. S&P E-mini futures dipped 0.1 percent after the Standard & Poor’s 500 index climbed 1.3 percent on Friday.
U.S. Treasury futures eased 2 ticks after the 10-year U.S. Treasury yield rose as much as 15 basis points to a four-week high of 2.763 percent on Friday.
Among commodities, gold slipped 0.1 percent to about $1,286 an ounce, adding to Friday’s 1.5 percent decline and languishing near a three-week low.
Brent crude prices rose 0.4 percent to around $105.5 a barrel, building on Friday’s 1.6 percent rise, which broke a three-day run of losses.
(Editing by Shri Navaratnam and Eric Meijer)