Asian equities’ best start to a year since 2006 continued Tuesday; The euro gained less than 0.05 percent
Asian equities’ best start to a year since 2006 continued Tuesday as most bourses in the region pushed higher. The yen declined amid concern Japanese authorities may want to limit gains that pushed the currency to a four-month high.
The MSCI Asia Pacific index climbed as advances in the consumer staples and technology sectors offset a drop in materials. Japanese shares closed at multi-decade highs, while stocks in Hong Kong headed for a record. The yen halted a five-day advance as Japanese Finance Minister Taro Aso said sudden moves in exchange rates are a problem, while declining to comment on levels. Treasuries steadied as the U.S. bond market reopened after a holiday.
Focus remains on China’s yuan, trading at the strongest level in more than two years and prompting speculation about possible steps to cool its gains.
Weakness for the greenback is extending into a sixth week despite a backdrop of solid U.S. economic growth. Traders appear to be more excited by potentially hawkish policy shifts from central banks in Europe and Japan, the improving political outlook in the euro area, and the synchronized nature of global expansion that’s also propelling emerging-market economies and assets.
Elsewhere, Brent crude slid from the highest in three years in London even as OPEC members called for output curbs to continue. Industrial metals declined, led by nickel.
Here’s what to watch out for this week:
- Earnings season ramps up: Taiwan Semiconductor Manufacturing Co., ASML Holdings NV, Bank of America Corp. and Goldman Sachs Group Inc. are among some notable releases.
- Industrial production in the U.S. probably increased in December, a report may show Wednesday, completing a solid year for manufacturing.
- U.S. housing starts probably slipped in December for the first time in three months as frigid winter weather impeded work, forecasts show ahead of Thursday’s release.
- The Bank of Canada’s interest-rate decision comes Wednesday. Monetary policy announcements are also this week due in South Korea, South Africa and Turkey.
- China releases fourth quarter GDP, December industrial production and retail sales Thursday.
And these are the main moves in markets:
- Japan’s Topix index rose 0.6 percent to close at the highest level since June 1991, Hong Kong’s Hang Seng Index climbed 1 percent, set for the highest close on record.
- Australia’s S&P/ASX 200 Index sank 0.2 percent.
- Futures on the S&P 500 Index gained 0.3 percent to the highest on record.
- The Bloomberg Dollar Spot Index rose 0.1 percent, the first advance in a week.
- The Japanese yen sank 0.4 percent to 110.93 per dollar, the first retreat in more than a week and the biggest dip in almost four weeks.
- The euro gained less than 0.05 percent to $1.2266, hitting the strongest in more than three years with its fifth consecutive advance.
- The yield on 10-year Treasuries was unchanged at 2.55 percent.
- Japan’s 10-year yield advanced less than one basis point to 0.078 percent
- West Texas Intermediate crude added 0.3 percent to $64.51 a barrel, hitting the highest in more than two years as Brent declined 0.4 percent to a shade under $70 a barrel.
- Gold gained 0.1 percent to $1,340.81 an ounce, reaching the highest in more than four months on its fifth consecutive advance.
- LME copper was at $7,210 per metric ton, halting two days of declines.