Asia stock markets advance after US jobs data disappoint; Nikkei at 3-month high

Asian markets traded higher, with investors cheering a disappointing U.S. August employment report, which pared expectations the Federal Reserve would hike interest rates in September. 

"Friday's non-farm payrolls report noticeably underperformed market expectations and effectively killed off the outside possibility of a September rate hike by the Fed," Angus Nicholson, a market analyst at IG, said in a Monday note. 

"Investors [are] in a contradictory situation as to whether they should be focusing on rates settings or the underlying economy," Nicholson added, pointing to the U.S. Friday session, when stocks initially surged on the payrolls miss, then pared gains. 

Japan's Nikkei 225 closed up 0.66 percent, or 111.95 points, at 17,037.63, touching its highest level in three months. The Japanese yen remained at the 103 handle against the greenback, trading at 103.41 as of 3:29 p.m. HK/SIN time.

In Australia, the benchmark ASX 200 finished up 1.06 percent, or 55.78 points, at 5,429.58. The materials sector surged 2.27 percent, while the energy subindex and financials subindex were up 1.07 percent and 1.46 percent, respectively.

Chinese mainland markets ended higher, with the Shanghai composite settled up 0.18 percent, or 5.436 points. at 3,072.788, while the Shenzhen composite closed up 0.438 percent, or 8.807 points at 2,018.102.

In Hong Kong, the Hang Seng index was up 1.62 percent as of 3:32 p.m. local time, at levels not seen since August 2015. In South Korea, the Kospi closed 1.07 percent higher, or 21.77 points, at 2,060.08.

In Southeast Asia, Thailand's SET index was down 1.88 percent at 3:35 p.m. HK/SIN, retracing early losses of more than 2 percent and touching lows not seen since mid-July.

Kasem Prunratanamala, an analyst at CIMB, said the decline was due to "massive" selling by local institutions weighing the market, possibly due to profit-taking on gains since the beginning of the year. 

Mayuree Chowvikran, a strategist at Maybank-Kim Eng, noted that the selling on Monday wasn't on fundamentals, but was due to the index falling briefly below key support levels.

Bank of Japan Governor Haruhiko Kuroda said in a seminar on Monday that the central bank still had "ample room for further monetary easing" and that "new ideas should not be off the table," Reuters reported. Kuroda also rejected market views that monetary policy had reached its limits.

However, Japanese markets did not react much to the BOJ chief's comments.

On the data front, China's August Caixin services purchasing managers' index rose to 52.1 on a seasonally-adjusted basis, from 51.7 in the previous month. A reading above 50 indicates an expansion of the services sector, while a reading below 50 indicates contraction.

In South Korea, troubled container shipper Hanjin Shipping's shares were down 13.71 percent, retracing much of its initial more than 22 percent drop when trading resumed following a six-day suspension. The money-losing shipping line's banks cut off financing last week, spurring ports around the world to effectively seize its vessels.

The South Korean shipping company also filed for bankruptcy protection in the U.S. to prevent creditors from seizing its vessels, the Wall Street Journal reported.  

Samsung Electronics' shares were up 0.56 percent after shedding 3 percent last week when the smartphone maker announced a recall of its latest product, the Galaxy Note 7, because of fire-prone batteries.  

"The recall plan will give consumers various options, including a full refund," analysts at Nomura AEJ said in a Monday note. "Samsung has put customer safety and brand image before a short-term loss burden...which was a response and sensible decision, but we are still unsure whether it is enough to attract those consumers who may change their minds about buying the Note 7."

In currency markets, the U.S. dollar index was trading at 95.639 in Asia time, after falling as low as 95.14 after the nonfarm payrolls release on Friday.

A line-up of Fed presidents will be speaking this week, along with the release of the Fed's Beige Book report on Wednesday.

"Their comments will be important in convincing markets that they are not dovish and that data supports a hike later this month. If so, the dollar index should push higher above 96 again," wrote DBS group Research's analysts in a Monday note.

Shares of Australia's major elderly care operators fell to record lows after the Department of Health warned providers they were not permitted to make residents pay for capital maintenance and refurbishment, Reuters reported. 

Estia Health shares dropped 11.75 percent, retracing some earlier losses of as much as 31 percent. Japara Healthcare lost 14.71  percent and Regis Healthcare shed 16.67 percent, retracing losses of more than 20 percent each earlier.

Crude oil futures fell in Asian trade, Benchmark Brent was trading 0.21 percent lower at $46.73 a barrel, while U.S. crude futures were down 0.38 percent, or $0.17, at $44.27.

Last week, Brent lost 6 percent, its biggest fall in five weeks, while U.S. crude fell 7 percent, reported Reuters.

Major U.S. indexes closed higher on Friday, with the Dow Jones industrial average up 0.39 percent. The S&P 500 gained 0.42 percent and the Nasdaq ended up 0.43 percent. 

U.S. markets will be closed Monday for the Labor Day public holiday.

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