Indonesian Stocks & Rupiah Update: Asian Stocks Surge on Weak US Jobs Data
Asian stock indices surged on Monday morning (05/10) on relief that the Federal Reserve may need to postpone a key Fed Fund Rate hike after the release of weak US jobs data at the end of last week. Indonesia's benchmark Jakarta Composite Index was up 2.40 percent to 4,309.71 points by 10:30 am local Jakarta time. Meanwhile, the rupiah had appreciated 0.59 percent to IDR 14,559 per US dollar by the same time (Bloomberg Dollar Index).
In September 2015 a total of 142,000 jobs were added to the US economy, well below the market consensus of 201,000. Moreover, August non-farm payrolls were revised down to 136,000 (from 173,000 initially). This means that it was the first time since mid-2013 that US jobs grew at such a slow pace in two consecutive months. So far in 2015 US non-farm payrolls grew at an average of 198,000 per month, significantly down from the average growth pace of 260,000 per month last year. Due to these weak data giving rise to a delay in the Fed Fund Rate hike, stocks on Wall Street immediately surged. On Friday (02/10) the Dow Jones Industrial Average climbed 1.23 percent, Standard & Poor's 500 Index rose 1.43 percent, and the Nasdaq Composite 1.74 percent. Asian stocks now follow suit on Monday.
By 10:35 am local Jakarta time, Japan's Nikkei 225 Index was up 1.22 percent, Singapore's Straits Times Index was up 1.42 percent, and Hong Kong's Hang Seng Index was up 1.67 percent. Markets in China, which have recently been plagued by severe volatility due to the bursting of a bubble and concern about China's economic growth, remain closed until Wednesday for a national holiday.
Meanwhile, most emerging currencies are strengthening against the US dollar today. Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.71 percent to IDR 14,604 per US dollar on Monday (05/10).
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia