HONG KONG: Asian markets fell on Monday after a better-than-expected rise in US job creation fueled concerns that the Federal Reserve will soon start to reel in its huge stimulus program.
The dollar edged down a tad after posting strong gains against the yen in New York City on Friday following the nonfarm payrolls figures, which add to a slew of data indicating the world’s top economy is strengthening.
Tokyo fell 1.40 percent, or 200.63 points to 14,109.34 despite the weakening yen, while Seoul slipped 0.90 percent, or 16.46 points to 1,816.85 and Sydney gave up 0.67 percent, or 32.3 points to 4,809.5. Hong Kong fell 1.31 percent, or 272.48 points to 20,582.19, while Shanghai lost 2.44 percent, or 48.93 points to end at 1,958.27.
The Labor Department said on Friday that the US economy added 195,000 jobs in June, well above the consensus estimate of 166,000 jobs. While the announcement shows that the US recovery is gaining traction, investors fear the Fed will now start cutting back its $85- billion a month bond-buying that has been credited with fuelling a rally in global markets.
When the central bank unveiled the scheme in September to keep interest rates down, it said that it would keep it in place until the economy was able to support itself and when unemployment had fallen.
The news hit indexes in emerging markets such as the Philippines and Indonesia amid fears of an outflow of foreign cash as the US money tap is turned off. However, Wall Street welcomed the news. The Dow climbed 0.98 percent, the S&P 500 rose 1.02 percent and the Nasdaq added 1.04 percent.
The likelihood that there will be fewer dollars pumped into the financial system, while interest rates could rise sent the greenback higher in New York, climbing to 101.14 yen on Friday, from 100.21 yen earlier in the day in Asian trade.
On Monday, the dollar edged up slightly to 101.17 yen.
The euro, which came under pressure last week after the European Central Bank said that it would keep rates at record lows for “as long as necessary,” bought $1.2835, compared with $1.2832 late on Friday. It was also at 129.85 yen from 129.78 yen.
In Seoul, Asiana Airlines fell 5.76 percent after one of its planes crashed while landing in San Francisco at the weekend, killing two passengers and injuring 182 more.