HONG KONG, China (AFP) — Asian markets rallied Monday following a forecast-busting US jobs report that reaffirmed the world’s top economy is improving, while investors were also cheered by the formation of new governments in Italy and Spain.
However, while the week has got off to a positive start, there are lingering worries about a possible global trade war after the US hit Canada, Mexico and the European Union with steel and aluminium tariffs.
Focus is turning to a Group of Seven summit in Quebec later in the week, where Donald Trump is expected to go head-to-head with other world leaders over the levies, while China has warned Washington off imposing any measures against it.
The EU and Canada have filed complaints at the World Trade Organization, while Treasury Secretary faced severe criticism at a G7 finance ministers’ gathering at the weekend.
All three main indexes on Wall Street ended sharply higher Friday after data showed the US created more jobs than expected in May, while the unemployment rate is at a near five-decade low. Separate figures showed US factory activity also beat estimates.
The gains in New York filtered through to Asia, where Tokyo ended the morning session 1.3 percent higher, while Hong Kong was also up 1.3 percent and Shanghai added 0.3 percent.
Sydney rose 0.7 percent, Seoul gained 0.4 percent and Taipei put on more than one percent.
The dollar also built on Friday’s surge against the yen as the strong jobs report also lifted expectations for another interest rate hike by the Federal Reserve next week.
The euro held its gains after Italy’s populist parties agreed to form a government, ending days of uncertainty that had fuelled fears of another election that would essentially be considered a referendum on its euro future.
A change of government