Precise Investors Editorial Team
Stocks in South Korea and Japan hit record highs in early trading, lifted by the technology sector
Asian stocks rose to a record high on Thursday, while the dollar firmed a bit against most currencies except the yen.
Stocks in South Korea and Japan hit record highs in early trading, lifted by the technology sector.
Japanese shares have been on a rise since Prime Minister Sanae Takaichi’s election victory over the weekend on a campaign of increased economic stimulus.
That has pushed MSCI’s broadest index of Asia-Pacific shares to another all-time high. The index was 0.65% higher, taking its gains in the first six weeks of the year to nearly 13%.
Market focus this week is also on U.S. economic reports with the data on Wednesday showing job growth unexpectedly accelerated in January while the unemployment rate eased a touch in signs of labour market stability that could encourage the U.S. central bank to leave rates unchanged in the near term.
Thomas Mathews, head of markets for Asia-Pacific at Capital Economics, said the big picture is that labour market conditions may be tightening at this point. If so, investors may be overestimating the case for further easing, and Treasuries could be in for a bit more pain.
Market expectations for a central bank cut of at least 25 basis points at the central bank’s March meeting had risen to about 20% before the jobs data, but retreated after the jobs report and were last at around 5%, according to CME’s FedWatch Tool. Traders are still pricing at least two rate cuts this year.
The yen was an exception amid dollar strength as it firmed again and last fetched 153.02 per U.S. dollar. The currency has soared almost 3% since Takaichi’s win as investors suspect the big mandate could lead the government to be fiscally responsible as it eliminates the need for negotiations with opposition parties.
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