Asian Stocks Reach Fresh Record High; Oil Climbs: Markets Wrap

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By Adam Haigh and Brian Chappatta

Masaaki Kanno, Sony Financial Holdings chief economist and senior fellow, discusses Bank of Japan monetary policy.

Asian stocks climbed to record highs Tuesday on optimism on corporate earnings and after the U.S. government shutdown moved toward an end. The yen strengthened as the Bank of Japan kept its monetary stimulus unchanged as expected.

Equities in Japan, Australia, Hong Kong and South Korea advanced following the S&P 500 Index’s rise to a record as Congress voted to end the government shutdown after three days. The dollar traded near lows for the year, while 10-year Treasury yields held near 2014 highs. The Taiwan dollar jumped to its strongest since January 2013.

 

The Bank of Japan left its policy settings unchanged, as forecast by all 43 economists surveyed by Bloomberg. Investors will scrutinize comments from the BOJ’s governor at his news conference at 3:30 p.m. Tokyo time for any sign that the central bank is closer to joining global peers in dialing back ultra-loose monetary policy.

Meanwhile, traders have responded positively so far to the flurry of results due this week from Japanese, European and U.S. companies. Netflix Inc. soared having posted its biggest quarter ever. Wynn Macau Ltd. gained 5 percent after reporting stronger-than-expected results. However, LG Electronics Inc. was among those underperforming thanks to the Trump administration’s latest protectionist moves, slapping tariffs on imports of dishwashers and solar products.

 

Elsewhere, West Texas Intermediate crude climbed toward $64 a barrel after OPEC and Russia said output cuts will continue until the end of the year. Bitcoin was drifting around $10,800.

Terminal users can read more in our markets blog.

Here’s what to watch out for this week:

  • Earnings season is in full swing: Novartis, General Electric, Intel, LVMH Moet Hennessy Louis Vuitton, Starbucks and Hyundai Motor come later in the week.
  • Barring any last minute changes in Washington, President Donald Trump will join world leaders and senior executives in Davos, Switzerland, for the annual World Economic Forum.
  • The European Central Bank announces its rate decision on Jan. 25.
  • U.K. Prime Minister Theresa May’s Brexit bill is set to be taken up in the House of Lords.

These are the main moves in markets:

Stocks

  • The MSCI Asia Pacific Index increased 0.7 percent as of 12:32 p.m. Tokyo time, the highest on record.
  • Topix index increased 0.8 percent to the highest in more than 26 years on the biggest climb in more than two weeks.
  • Hong Kong’s Hang Seng Index rose 1.1 percent, hitting the highest on record with its sixth straight advance and the largest advance in a week.
  • Australia’s S&P/ASX 200 Index gained 0.7 percent, hitting the highest in a week with the first advance in more than a week and the largest climb in more than two weeks.
  • Futures on the S&P 500 Index increased 0.1 percent to the highest on record.


Currencies

  • The Bloomberg Dollar Spot Index declined less than 0.05 percent to the lowest in about three years.
  • The Japanese yen rose 0.2 percent to 110.74 per dollar, the strongest in a week.
  • The euro declined less than 0.05 percent to $1.2258.


Bonds

  • The yield on 10-year Treasuries was unchanged at 2.65 percent.
  • Japan’s 10-year yield declined less than one basis point to 0.076 percent, the lowest in more than a week.


Commodities

  • West Texas Intermediate crude gained 0.6 percent to $63.97 a barrel, the highest in more than a week on the biggest rise in more than a week.
  • Gold gained 0.2 percent to $1,336.16 an ounce, the highest in a week.
  • LME copper increased 0.1 percent to $7,077.00 per metric ton, the highest in a week.

 

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