Asian stock markets opened higher on Monday, October 5, 2026, lifted by a weaker-than-expected U.S. employment report for September that sharply reduced investor expectations for an imminent Federal Reserve interest rate hike.
The U.S. economy added 29,000 jobs in September, according to Labor Department figures released on Friday, falling well short of analysts’ forecasts for an increase of 84,000. Revisions to the previous two months were also adjusted downward. The national unemployment rate ticked up to 4.2% from 4.1% in August. Following the release, the CME FedWatch tool showed that investors priced the probability of an October rate increase at roughly 20% to 22.7%, down sharply from 64% a week earlier.
Japan’s Nikkei Surges as Risk Appetite Returns to Regional Markets
Regional equity performance reflected a broad improvement in risk appetite, though trading volumes remained subdued due to public holidays in China and South Korea. Japan led the regional rally, with the Nikkei 225 jumping between 2% and 2.6% to near 70,000, reaching a three-month high. The broader Topix index advanced more than 1%. Technology shares and semiconductor issues posted strong gains following a record close on Wall Street for the Nasdaq 100. MSCI’s Asia Pacific equities index gained 0.4%, while Japanese shares rallied over 2%. In India, the GIFT Nifty indicated a muted start in the green.
Australia’s benchmark index edged higher, while Singapore’s Straits Times Index posted modest gains. In India, the Sensex rebounded from four consecutive sessions of losses to rise about 0.9% to 72,546, helped by easing oil prices and a weaker dollar backdrop despite ongoing foreign fund outflows. Meanwhile, Hong Kong’s Hang Seng index traded flat to slightly lower, and Hang Seng futures slipped 0.2%.
Trading conditions across the region were shaped by additional holiday closures, as South Korea’s stock market stayed shut for the country’s National Foundation Day holiday. Currency markets saw the Japanese yen strengthen 0.1% to 157.63 per dollar, while the dollar gained 0.12% against the yen to 158.01 and sterling slipped 0.25% to $1.3205. The offshore yuan held little changed at 6.7068 per dollar.
Corporate activity also accompanied the market moves in select sectors. Shares of one company rose 1% after an agreement was reached to acquire Akzo Nobel’s Southeast Asian unit in a transaction valued at $1.35 billion.
Bond Yields Remain Elevated Despite Fed Rate Pause Hopes
Even as rate-hike bets faded, global debt markets remained under considerable pressure. The benchmark U.S. 10-year Treasury yield stood near 5.2579%, hovering close to multi-year highs touched the previous week amid persistent concerns over heavy government spending, debt issuance, and the extensive borrowing required to fund artificial intelligence infrastructure.
Analysts observed that while the softer labor figures give the central bank room to pause, structural factors continue to weigh on bonds. The main theme was a reversal towards risk-on sentiment as a sharply weaker-than-expected U.S. jobs report eased fears of further tightening
by the Federal Reserve, Commerzbank Research analysts noted in a report. Markets also looked toward upcoming events, including the Federal Reserve publishing the minutes of its September meeting on Wednesday, October 7, which may provide further insight into how policymakers view underlying price trends and inflation expectations.
Crude Oil Eases on Planned G7 Emergency Reserve Releases
In commodity markets, crude oil prices pulled back from earlier advances following coordinated supply announcements. Front-month Brent crude for December delivery rose above $103 a barrel early in the session before paring gains to trade around $102, supported in part after Yemen launched a bid to recapture Houthi-controlled areas. Front-month West Texas Intermediate crude futures dropped 0.6% to $90.60 a barrel.
Spot gold steadied near $4,150 an ounce, balancing the weaker U.S. employment figures against elevated long-term bond yields and ongoing geopolitical uncertainties across the Middle East. Spot gold specifically rose 0.3% to $4,154.32 an ounce in broader commodity trading.
