Overnight Markets: Commodities prices boost Asian stocks

Asian equities were trading higher on Monday, led by mining companies and Japanese exporters, after the yen weakened against the dollar and commodity prices rose.

MSCI Asia Pacific Index gained 0.5% to 128 as of 10:53 a.m. in Tokyo. Japan’s Nikkei 225 Stock Average - which rose 0.4% on Friday, boosted by short-covering – climbed 1.1% on Monday. Australia’s S&P/ASX 200 Index was trading 1% higher, while South Korea’s Kospi index rose 0.7%. Chinese markets are shut this week.

Investors will be closely watching Bank of Japan’s policy decision on Tuesday with the market expecting a further easing. Toshiro Muto, former BOJ Deputy Governor, on Friday said the central bank might ease policy as inaction would run the risk of spurring further yen gains amid the prospects for easing by the US Federal Reserve.

In a poll conducted by Reuters, most economists expected yet another expansion of a cheap fund-supply tool that the BOJ set up in December and expanded in March and August.

In company news, BHP Billiton Ltd rose 1.4% in Sydney on speculation commodities demand in the US will increase. Hyundai Motor Co. climbed 2.6% in Seoul after its US sales increased to a record for September. Honda Motor Co. advanced 1.3%.

In the US and Europe, a raft of data scheduled to be released this week and policymaker meetings are set to steer stock markets and determine whether the past quarter’s stellar gains for equities can be sustained.

Investors will focus on Friday’s US non-farm payrolls data for September which is expected to show a meager 5,000 increase in jobs following August’s 54,000 figure.

Earlier in the week an update on the US’ services sector and rate-setting meetings taking place in Europe, the UK, Japan and Australia will offer further clues.

ISM’s non-manufacturing index will be released on Tuesday after August’s disappointing eight-month low figure of 51.5.

On Thursday, the Bank of England monetary policy committee will consider fresh quantitative easing. The committee is expected to remain on hold with easing, and with interest rates at 0.5%. European Central Bank rate-setters are also set to keep rates unchanged at 1%.