A pedestrian looks at an electronic board displaying various countries’ stock market indices outside a brokerage in Tokyo yesterday. Tokyo’s Nikkei sped to a six-year peak, adding about 0.8% and topping the 16,000-mark, driven by buying from long-only investors after Wall Street marched upwards.

AFP 

Tokyo

Asian markets extended gains yesterday following another record-breaking close on Wall Street, with Japan’s Nikkei tapping a six-year closing high as the dollar renewed its upward trend against the yen.

Chinese shares enjoyed a second day of buying, although there are still lingering fears about a liquidity crisis despite a cash injection from the country’s central bank.

Tokyo added 0.12%, or 18.91 points, to 15,889.33, its highest finish since December 2007.

Hong Kong rose 1.13%, or 257.99 points to 23,179.55, Sydney closed 0.67%, or 35.3 points, higher at 5,327.2 and Seoul was 0.24% higher, adding 4.70 points to 2,001.59.

Shanghai ended 0.15% higher, advancing 3.20 points to 2,092.91.

Manila was closed for a public holiday.

On Wall Street the Dow and S&P 500 closed Monday at all-time highs yet again after fresh Commerce Department data pointed to a 0.5% increase in consumer spending in November, the second month in a row to see a rise.

An estimate of consumer confidence by the University of Michigan also showed an improvement in December.

The news added to a run of recent figures showing a pick-up in the US economy – including data on unemployment and economic growth – indicating it is well on the road to recovery.

And last week the Federal Reserve gave it a vote of confidence as it said it would from next month reduce its stimulus programme by $10bn to $75bn a month.  The dollar continued to benefit from the positive news out of Washington. In afternoon Asian trade it was at 104.26 yen compared with 104.11 yen in New York. The greenback is approaching the five-year high of 104.63 yen touched last week.

The euro bought $1.3682 and 142.61 yen against $1.3695 and 142.58 yen. Traders are keeping an eye on China, where authorities last week said they had pumped almost $50bn into financial markets to avert a cash crunch, which had sent interbank borrowing rates to six-month highs and left banks unable to borrow.  The turmoil came as banks and other investors scrambled for cash as they approach the end of the year, when they typically have to meet regulatory requirements and funding demands from companies.

“The negative sentiment toward China’s cash crunch has been eased after the central bank’s latest move,” Steven Leung, head of institutional sales at UOB Kay Hian, told Dow Jones Newswires.

However, while equities are slightly higher, analysts warn the problem may not have gone away just yet and will be looking to see whether the People’s Bank of China continues to feed the system.  On oil markets New York’s main contract, West Texas Intermediate for February delivery, was down 25 cents at $98.66 in early Asian trading. Brent North Sea crude for February fell one cent to $111.56.  Gold fetched $1,197.50 at 1048 GMT compared with $1,195.04 late Monday.

 In other markets, Taipei was flat, edging down 5.97 points to 8,450.49, Wellington rose 0.96%, or 45.30 points, to 4,76794, Kuala Lumpur gained 0.14%, or 2.63 points, to 1,835.49 and Jakarta ended up 0.32%, or 13.23 points, at 4,202.83.