BCMXY Bank of Communications Company Ltd (PK)

Shares in Japan rallied to a fresh 2½ -month high Monday, while other Asian markets fell after China's deteriorating exports added further gloom to its economic outlook.

Japan's Nikkei Stock Average rose 1.2% to 19492.04, its highest intraday level since late August in early trading on a weakening yen.

Australia's S&P/ASX 200 was down 0.8% while South Korea's Kospi lost 0.6%.

Over the weekend, data showed Chinese exports in October fell for the fourth consecutive month, by 6.9% year-over-year in dollar terms, after a drop of 3.7% in September. The October figure was worse than the median 4.1% decline forecast in a Wall Street Journal poll.

When Chinese markets open, investors also will assess the impact of regulators' announcement late Friday to resume initial public offerings, after suspending them in July in the heat of a share selloff.

China's stock regulator has disrupted the timing of public offerings frequently in the past, as a way to adjust market conditions. Since 1990, the market has declined five times and risen four during periods when regulators allowed companies to list, according to a morning note by Bank of Communications Ltd.

"From the perspective of regulators, they think the rally will continue, which is why they will resume IPOs," said Louis Lu, fund manager at CSOP Asset Management. The Shanghai Composite Index, which gained 6% last week to 3590.03, is now in bull market territory—defined as a rise of 20% from a recent low. Analysts says its cross above 3500 could inspire more local investors to buy shares again.

Mr. Lu said the Chinese exports data could pressure authorities to step up stimulus, which would boost markets later Monday.

"Our view is the Chinese market will rally until December before the Federal Reserve [raises] rates," he said.

A strong October jobs report in the U.S. on Friday firmed expectations that the Federal Reserve will raise interest rates next month.

On Saturday, China's central bank reported that foreign-exchange reserves in October rose by $11.39 billion to $3.526 trillion, ending a five-month streak of monthly declines. Economists said it signaled weaker expectations among investors that the yuan would depreciate further and signal that officials' efforts to stem illegal outflows have met some success.

Shares in Japan rose as the yen reached a fresh low since late August, weakening to ¥ 123.31 per U.S. dollar. Most of the losses came immediately after the U.S. jobs report on Friday, which pushed up the dollar. The yen traded around ¥ 121.80 to one U.S. dollar late in Asia Friday, before the report's release. A weaker yen boosts shares of exporters, whose goods become cheaper with a weaker currency.

In the U.S., shares were little changed Friday, but underlying sectors swung sharply as investors moved money out of income-yielding companies, which do well during periods of low interest rates, and into banks, whose profits are expected to increase as rates rise.

Shares in Australia fell, as commodity prices continued to decline.

Iron ore prices Friday hit a four-month low of $47.40 per ton, according to The Steel Index, while the price for Brent crude oil, the global benchmark, fell 1.2% on concerns of a supply glut. Both trends are set to weigh on mining and energy stocks, particularly as the dollar strengthens with increasing expectations of a higher U.S. rates.

Shares of BHP Billiton Ltd., the country's largest commodity producer, were down 3.5% after a deadly dam break at one of its jointly owned mines in Brazil. After the largest spill of its kind, the official death toll of three is expected to rise, with at least 28 people confirmed missing.

The mine's operator, Samarco Mineraç ã o SA, is jointly owned by Vale SA of Brazil and Australia's BHP Billiton.

In early Asia trade, Brent crude oil prices were up 0.2% at $44.39 a barrel.

Gold was up 0.1% at $1,088.90 a troy ounce.

Write to Chao Deng at Chao.Deng@wsj.com

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(END) Dow Jones Newswires

November 08, 2015 21:05 ET (02:05 GMT)

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