Shares Slip in Japan, Gain in Australia After U.S. Jobs Report

Stocks in Japan and Hong Kong slid on Monday, as investors dialed back expectations for higher U.S. interest rates, while in Australia, higher commodities prices buoyed shares.

The Nikkei Stock Average was down 1.1%, and the Hang Seng Index slipped by 0.4%.

The Shanghai Composite Index was down 0.2% while Australia's S&P ASX 200 gained 0.9%.

Weakness in several Asian markets emerged after a U.S. jobs report on Friday cast doubt on the possibility of higher U.S. interest rates in the next few months. U.S. employers added just 38,000 jobs in May, the lowest number in more than five years.

While the prospect of further delays in raising U.S. interest rates could bode well for money flows into riskier assets, including Asian stocks, the jobs report also stirred worries that the U.S. economic recovery has gone off track.

"The disastrous U.S. nonfarm payrolls release on Friday has killed off any chance of a June rate hike by the Fed," said Angus Nicholson, market strategist with brokerage IG.

Futures markets now put the probability of a U.S. interest-rate increase at 4% for June and 31% for July, according to the Chicago Mercantile Exchange.

Asian currencies rose during U.S. trading hours on Friday, as the U.S. dollar tumbled on the back of the jobs report.

On Monday, Asian currencies continued upward against the dollar, with the Malaysian ringgit up 1.6% and the Philippine peso up 0.5%.

The Japanese yen was last up 0.5% at ¥ 107.05 to the dollar. It strengthened by more than 2% during the U.S. trading day Friday. A stronger yen hurts the competitiveness of Japans's exporters.

As investors sold down shares of Japanese autos and other exporters Monday, a number of Tokyo-listed food makers sharply outperformed the market. Juice-maker Kagome Co. was up 2.3% at ¥ 2,862, mayonnaise-maker Kewpie Corp. was up 1.2% at ¥ 2,991 and snack-foods maker Calbee Inc. was up 1.3% at ¥ 4,000.

In Australia, materials stocks got a boost from oil and iron ore, whose prices bounced on weakness in the U.S. dollar. These commodities are priced in dollars. BHP Billiton Ltd., Australia's biggest mining company, was up 3.8%, while Rio Tinto Ltd. was up 3.1%.

In China, markets were in a holding pattern, as investors await Wednesday May exports data. It is expected to show a 4.6% decline from a year earlier, extending April's drop of 1.8%, according to a survey by The Wall Street Journal.

Earlier Monday, Chinese authorities guided the yuan stronger against the U.S. dollar via its daily "fix," reflecting the dollars's drop Friday. The U.S.-China Strategic Economic Dialogue, annual talks between officials in the two countries, are under way in Beijing.

Kosaku Narioka and Vera Sprothen contributed to this article.

(END) Dow Jones Newswires

June 06, 2016 00:45 ET (04:45 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.