Week in Review: Markets Remain Steady Amid U.S. Shutdown

The Bank of Japan (BoJ) signalled that it remains on a gradual tightening path but provided limited guidance on the timing of its next rate hike. Governor Kazuo Ueda noted that rates were left unchanged at the September meeting to maintain accommodative conditions amid U.S. tariff volatility. While the tariffs have weighed on exporters’ earnings, there are no signs of spill overs to the broader economy.

The U.S. federal government shut down on October 1 after Congress failed to pass a funding bill. The shutdown has furloughed hundreds of thousands of federal workers, halted non-essential services, and delayed key data releases. Among the most notable was the September nonfarm payrolls report from the Bureau of Labor Statistics, which did not go ahead as scheduled. If the shutdown persists, other critical releases (such as the September CPI due October 15) may also be delayed.

On the labour front, the unemployment rate in the bloc edged up to 6.3% in August from July’s record low of 6.2%. Spain, France, and Italy recorded the highest unemployment rates, while Germany and the Netherlands posted the lowest. On a year-over-year basis, unemployment was unchanged at 6.3%.

In Asia, Japan’s Nikkei 225 rose 0.91%. Mainland Chinese equities also advanced in a holiday-shortened week, with the Shanghai Composite up 1.43% through Tuesday, September 30, before markets closed for the Golden Week holiday from October 1 to 8. In Hong Kong, the Hang Seng Index gained 3.82%, despite the market being closed on Wednesday for National Day..

Market Moves of the Week

South African markets mirrored global trends, posting gains over the week. The JSE All-Share Index rose 2.88%, supported by broad-based sector gains. Industrials led the advance with a 4.12% return, while other sectors also made meaningful contributions. The rand strengthened 0.21% against the U.S. dollar, closing at R17.21/USD.

Chart of the Week:

Despite the U.S. government shutdown and potential federal layoffs, the S&P 500 continued to rise during the week, hitting new all-time highs as markets discount near-term fiscal risks. Credits: Strategiq