Daily Times

HONG KONG – Japanese stocks rallied as the dollar strengthened in holiday-thinned trade Monday, with most markets across Asia closed for the Lunar New Year holiday.

A report Friday, showing that the US jobless rate had fallen to an eight-year low and wage growth had picked up, fuelled speculation of another US interest rate rise next month despite the recent chaos on global stock exchanges.

Crude climbed almost one percent after major exporter Saudi Arabia said its oil minister Ali al-Naimi had met his Venezuelan counterpart Sunday to discuss the South American country’s talks with other producers to boost prices.

The plunge in prices to 12-year lows – due to a major supply glut, weak demand and a strong dollar – has hammered producer nations such as Venezuela and Nigeria which rely on oil sales to fuel their economies. However, the OPEC producers’ group – of which Saudi Arabia is the key member – has refused to cut output as it tries to maintain market share in the face of competition from US shale.

US benchmark West Texas Intermediate and Brent both climbed 0.9 per cent, but analysts said there was unlikely to be a real recovery in prices any time soon. WTI is down almost 20 percent this year and Brent down more than 10 per cent.

“There are very little signs of abatement on the supply side,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, told Bloomberg News. Japan’s Nikkei finished 1.1 percent higher, having fallen more than one percent soon after the open. Sydney closed flat.

The yen retreated against the dollar as dealers saw an increased chance of another US rate rise this year, after the January jobs report showed that hiring eased but the unemployment rate slipped to 4.9 per cent and that wage growth increased modestly.

The Japanese currency had rallied last week on weak US data and comments from officials indicating they would hold off lifting rates at the US Federal Reserve’s policy meeting next month.