Bangkok: Asian markets advanced on Tuesday, with Japan’s benchmark approaching the symbolically important 50,000 level for the first time as conservative lawmaker Sanae Takaichi was chosen as the country’s first female prime minister.
The Nikkei 225 in Tokyo was up 0.8 per cent at 49,595.72 as Japanese lawmakers to elect Takaichi. She is expected to support market-friendly policies such as low interest rates and more government spending although her coalition government barely has a majority in the parliament.
The US dollar rose to 151.05 Japanese yen from 150.75 yen. If Takaichi gets her way in slowing interest rate increases by the Bank of Japan, the yen is likely to remain relatively weak against the dollar. That will hinder the bank’s efforts to curb inflation, which now stands above its target rate of about 2 per cent.
Hong Kong’s Hang Seng added 1.7 per cent to 26,286.47 and the Shanghai Composite index was up 1.2 per cent at 3,910.13.
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Expectations that US President Donald Trump will meet with Chinese President Xi Jinping later this month during a regional summit have raised hopes for an easing of trade tensions between the world’s two biggest economies.
In South Korea, the Kospi gained 0.5 per cent to 3,833.43, while Australia’s S&P/ASX 200 climbed 0.8 per cent to 9,099.30.
Taiwan’s Taiex rose 0.3 per cent.
US stocks rallied on Monday to the cusp of their records.
The S&P 500 climbed 1.1 per cent to 6,735.13, pulling within 0.3 per cent of its all-time high set earlier this month. The Dow Jones Industrial Average jumped 1.1 per cent to 46,706.58. The Nasdaq composite gained 1.4 per cent to 22,990.54.
Apple rose 3.9 per cent to its own record high amid optimism about demand for its latest iPhone design. It was the strongest force lifting the S&P 500.
Cleveland-Cliffs jumped 21.5 per cent after the steel company’s CEO, Lourenco Goncalves, said it would provide details soon about a potential deal with a major global steel producer that could mean bigger profits. He also said his company has potentially found signs of rare earths at sites in Michigan and Minnesota.
Such materials have grabbed the global spotlight after China recently put curbs on the export of its own rare earths, a move that President Donald Trump characterised as hostile.
Trump’s ensuing threat of higher tariffs triggered big swings for Wall Street, but the concerns eased a bit after Trump said such high tax rates on Chinese imports are unsustainable.
Amazon’s stock held up despite a widespread outage for its cloud computing service that caused disruption for internet users around the world Monday. Amazon’s stock rose 1.6 per cent.
This week features a raft of big names reporting their latest quarterly results, including Coca-Cola on Tuesday, Tesla on Wednesday and Procter & Gamble on Friday.
The pressure is on companies to show that their profits are growing following a torrid rally of 35 per cent for the S&P 500 from a low in April. Companies face pressure to improve their profitability to counter fears that stock prices have gone too high.
Corporate profit reports have also taken on more importance because they offer windows into the strength of the US economy when the US government’s shutdown has delayed important economic updates.
That’s making the job of the Federal Reserve more difficult, as it tries to decide whether high inflation or the slowing job market is the bigger issue for the economy. Fed officials have indicated they’re likely to cut rates several more times in order to give the economy a boost. But that could be a mistake if inflation worsens, because low interest rates can push it even higher.
On Friday, the US government will issue an update for inflation during September. The report was supposed to arrive earlier in month, and the Social Security Administration needs the numbers to calculate cost-of-living adjustments for beneficiaries. But the government also said, “No other releases will be rescheduled or produced until the resumption of regular government services.”
In other dealings early Tuesday, US benchmark crude oil lost 12 cents to USD 56.90 per barrel. Brent crude, the international standard, fell 13 cents to USD 60.88 per barrel.
The euro slipped to USD 1.1635 from USD 1.1641.
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