Asian markets chase record Wall Street close

  • hopeful outlook
- Agence France-Presse, HONG KONG
The dollar, which has struggled in recent weeks against the safe-haven yen, also broke out of its malaise

Apr 22, 2017-Asian markets built on a Wall Street rally on Friday as geopolitical fears gave way to fresh hopes for Donald Trump’s stimulus after his top finance man said a US tax reform plan would be released “very soon”.

Global markets have taken a hit this month owing to concerns about US-Russia relations, tensions on the Korean peninsula and the president’s failure to push through a key healthcare bill.

But the risk-off mood was smothered after Treasury Secretary Steven Mnuchin said the tax code overhaul promised by Trump was close. The reforms, along with promises for big infrastructure spending, were a key driver of a global equity rally since the tycoon’s November election win.

The news was met with relief by Wall Street, with the Nasdaq leading a surge in all three main indexes and hitting a new record high. The dollar, which has struggled in recent weeks against the safe-haven yen, also broke out of its malaise, buying 109.34 yen from 109.31 yen in New York and well up from 108.80 yen in Asia Thursday.

Adding to the dollar bounce were comments from a top Federal Reserve official saying he expected the central bank to hike interest rates three times this year. Tokyo’s Nikkei closed up one percent as exporters were boosted by the weaker yen and comments from Bank of Japan Governor Haruhiko Kuroda that he would maintain a loose monetary policy, despite an improvement in the economy.

Hong Kong added 0.2 percent in the afternoon, while Sydney put on 0.6 percent, Seoul jumped 0.7 percent and Taipei 0.9 percent. There were also strong gains in Singapore and Manila. Jakarta was higher after US Vice President Mike Pence announced $10 billion in US-Indonesian deals.

Shanghai was flat, with investors fretting over news that Trump had ordered a probe into US steel imports, which raised anew the threat of a trade war between the US and China.

On forex markets the euro suffered a brief dive against the dollar after a gunman -- who the Islamic State group said was one of their followers -- opened fire in the middle of Paris, killing one policeman. The currency later recovered and was flat against the dollar in early Asian trade. “It looks like the Trump administration wants to reignite the market’s expectations for policies,” Hideyuki Ishiguro, a senior strategist at Daiwa Securities in Tokyo, told Bloomberg News.

“Kuroda’s comments didn’t diverge from his past stance, but since the yen had strengthened a fair amount it became a trigger for some profit-taking.”

Attention now turns to this weekend’s first-round presidential vote in France, with a four-way split leaving analysts unable to work out which two candidates are likely to win through a second phase.

While there are fears the far-right Marine Le Pen will qualify, observers believe the moderate Emmanuel Macron will beat her in next month’s run-off.

Published: 22-04-2017 08:36

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