Asian stocks headed higher Monday after the U.S. reported stronger-than-expected job growth last week and the head of the European Central Bank said he will increase stimulus if needed to boost the region's economy. These developments already pushed U.S. stocks more than 2 percent higher on Friday.
On Monday morning, Japan's Nikkei 225 climbed 1.3 percent, South Korea's KOSPI index 0.4 percent and Australia's ASX 200 1.2 percent.
The U.S. reported 211,000 new non-farm jobs in November, compared with the 200,000 expected by economists. October's new jobs total was also revised upward to 298,000. While this sign of the health of the U.S. economy cemented expectations that that Federal Reserve will raise interest rates for the first time in nine years next week, investors have been factoring that in for weeks amid other positive data and statements by Fed officials.
“The post-payrolls rally in U.S. equities was notable,” Bloomberg reported Kymberly Martin, a markets strategist in Wellington at Bank of New Zealand Ltd., as saying. “The market appears to have read the data as reason for confidence in the economic outlook, rather than taking flight at the prospect of imminent reduction in U.S. Fed stimulus.”
In addition, the Fed has sent signals that further increases will be gradual.
Meanwhile, ECB President Mario Draghi reassured markets in a speech in Washington Friday, saying stimulus measures are "here to stay" with "no particular limit." Some investors were disappointed on Thursday when the ECB extended its bond-buying program without increasing the monthly amount, and reduced interest rates less than they expected.
"In many ways he was trying to undo some of the damage from the perception that he didn't do enough," Reuters reported Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey, as saying.