Asian stocks hit one-year highs on Monday as investors seek greater yields amidst a backdrop of a recovering U.S. economy and easing global monetary policy conditions.
A strong July U.S. payrolls report raised hopes the country may have turned a corner after some volatile readings this year and markets are looking to the Federal Reserve to introduce a hike in 2017 given that other countries are still cutting rates.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 percent and hit its highest level since August 11 last year. It is up 12 percent in six weeks. The Australian dollar also climbed.
Referring to stretched valuations, Cliff Tan, East Asian head of global markets research at Bank of Tokyo- Mitsubishi UFJ based in Hong Kong said, "The general sentiment among investors in emerging markets is to make hay while the sun shines even though this rally is starting to look a bit dangerous."
Japan and Australian markets led regional gainers while mainland China shares lagged, weighed down by disappointing Chinese trade data.
225,000 New US Jobs
The U.S. Department of Labor said July nonfarm payrolls rose by 255,000 and revised the June increase upward to 292,000.
The strong U.S. jobs report was the only positive data in the global economy, with Australia's central bank and the Bank of England cutting interest rates last week and New Zealand set to follow in coming days.
The US dollar was up 0.3 percent at 102.04 yen, holding steady against the euro at $1.10925 EUR.
The dollar index, which tracks the greenback against a basket of six major rivals, softened to 96.169, close to a one-week high of 96.522 hit on Friday after the jobs report.
Despite a cut in interest rates last week, the Aussie was among best performing currency in Asia as its relatively higher interest rate offer and AAA credit ratings strengthened its appeal. It was up 0.01 percent at 0.7613.