Asian stocks and currencies rose on Monday as investors bet that a surge in the U.S. unemployment rate to a 26-1/2-year high would force policymakers to keep many stimulus measures in place until an economic recovery was on more solid footing.
U.S. stock futures edged up while U.S. Treasuries sagged ahead of $81 billion worth of new supply this week.
The message of status quo was well reflected in markets with U.S. job market contraction remaining near a trend rate and G20 finance leaders ending a weekend meeting without any concrete proposals to rebalance the global economy.
That meant the winner will be asset prices.
On the one hand, as long as the recovery is not strong enough, central banks will keep on supporting liquidity and asset prices may benefit, said Sebastien Barbe, strategist with Calyon in Hong Kong.
On the other, central banks may begin to tighten monetary conditions in coming quarters, but only when economic growth has gained sufficient momentum and sustainability, and this restored economic strength may also to some extent support asset prices despite central bank tightening, Barbe said in a note.
The MSCI index of Asia Pacific stocks outside Japan rose 1.3 percent, having risen about 5 percent since hitting a one-month low a week ago.
The materials sector was the biggest outperformer followed by financials. Telecommunications and utilities, traditional defensive plays, were laggards.
A Thomson Reuters index of regional shares was up 1.3 percent.
Japan's Nikkei share average was flat.
The Australian benchmark S&P/ASX 200 index rose 1.6 percent and led the region.
Shares of AXA Asia Pacific Holdings shot up 30 percent after the insurer rejected a $10.3 billion break-up plan that would have left its assets split between its parent and a rival.
In addition to equities, dealers went straight for Asian currencies as the U.S. dollar remained under pressure.
G20 finance officials failed to talk more specifically about the dollar's recent decline at their weekend meeting.
Also hurting the dollar was a statement by the International Monetary Fund which said while the U.S. dollar has depreciated in the recent months, it still remained on the strong side, sparking another bout of selling in Asia.
The dollar was down 0.6 percent to 1160.90 against the South Korean won and 1 percent against the Phillipine peso.
The euro edged up 0.2 percent to $1.4909, creeping back up toward a 14-month high above $1.50.
Long-dated U.S. Treasuries slid in the cash market, pushing up the 30-year yield to 4.42 percent.
The U.S. government will auction $81 billion in debt this week, including $16 billion in 30-year bonds.
Oil prices rose about 1 percent to $78.28 a barrel, recouping some of the previous session's near 3 percent loss, on concerns that a powerful hurricane would cut U.S. oil and gas supplies.
(Editing by Kim Coghill)