Asian stocks and currencies rose on Monday on bets 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 spread further.
In bond markets, however, worries grew about how governments would pay for all the stimulus. The benchmark 10-year Japanese government bond yield rose to a 4-1/2-month high and the spread of the 10-year U.S. Treasury yield over the 2-year yield widened to the most since July 27.
Major European stocks were expected were expected to open as much as 0.9 percent higher, following the gains in Asia, financial bookmakers indicated.
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 1.4 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 also up 1.4 percent.
Japan's Nikkei share average finished 0.2 percent higher.
The Australian benchmark S&P/ASX 200 index rose 1.8 percent and led the region.
Shares of AXA Asia Pacific Holdings shot up 32 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.
DOLLAR KEEPS GETTING SMACKED
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.
Now that a series of major economic events is over, relief has prevailed among investors that it's OK to sell the dollar, a currency trader with a Japanese bank said.
The dollar was down 0.6 percent against the South Korean won and 1 percent against weaker the Phillipine peso.
The euro rose 0.3 percent to $1.4930, creeping back up toward a 14-month high above $1.50 and recouping losses made after weak U.S. jobs data lifted safe haven demand for the dollar and the yen.
The Labor Department reported on Friday that U.S. employers cut a larger-than-expected 190,000 jobs in October and the unemployment rate rose to 10.2 percent lifted prices of most U.S. government securities.
The sliding dollar pushed up gold prices to record highs. In the spot market, gold climbed to a high of $1,104.80 an ounce, up 26 percent on the year. That return exceeds the gain on the S&P 500, which is up 18 percent so far this year.
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 1.2 percent to $78.35 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.
(Additional reporting by Kaori Kaneko in TOKYO; Editing by Kazunori Takada)