Asian markets mostly rose yesterday following a fresh Wall Street record as traders are pumped up by strong corporate results and expectations of fresh stimulus.
After a slight stumble Tuesday and Wednesday caused by profit-taking, the equities rally resumed with Tokyo again leading the pack following a report that Japan is planning a new, giant stimulus programme.
Prime Minister Shinzo Abe is eyeing a package of at least ¥20tn – about double the size initially expected – to kickstart the economy from years of slumber and light a fire under torpid inflation, Kyodo News agency said.
The likelihood of more yen flooding financial markets sent the currency tumbling, which in turn boosted stocks, particularly exporters who benefit from a weaker unit.
The Nikkei ended 0.8% higher, with the dollar climbing to ¥107.22 from ¥106.87 in New York, and well up from the ¥100 levels seen before the US released blockbuster jobs data at the start of the month.
The euro rose to 118.37 yen from 117.72 yen.
Other stock markets followed suit, with Hong Kong rising 0.5 % to end above 22,000 for the first time since December 24.
Shanghai climbed 0.4%, Sydney added 0.4% and Wellington added 0.6% while Taipei was 0.5% higher.
However, Seoul eased 0.2 %.
The advances follow a positive lead from Wall Street, where the Dow and S&P 500 closed at all-time highs on the back of a string of upbeat earnings reports and outlooks from big-name firms such as Microsoft, Intel and Morgan Stanley. “We have better corporate earnings, likely bold fiscal stimulus in Japan, zero interest rates helping to absorb every macro shock we hear about and broad monetary easing,” Chris Weston, chief market strategist at IG in Melbourne, told Bloomberg News.
“If equity markets can’t rally in this environment they never will and really the key concern holding back fresh capital is significantly elevated valuations.”