Tokyo resumed its surge on Thursday, leading a broad Asia rally following another record close on Wall Street, while investors are keeping tabs on a key meeting between Donald Trump and Xi Jinping.
Global traders have been emboldened in recent weeks by a series of positive corporate results and data that indicate the world economy is on a sure footing, reports BSS.
Japan’s Nikkei returned to its upward trajectory after Wednesday’s retreat, with investors buoyed by a weaker yen, which has come under pressure from the dollar on lingering hopes for an overhaul of the US tax system.
“Foreign investors are actively buying Japanese shares” that are relatively cheap compared to shares in foreign markets, Hiroaki Hiwata, strategist at Toyo Securities, told reporters.
The two percent rise in the Nikkei in the morning came as Hong Kong added 0.6 percent, Sydney gained 0.4 percent and Seoul put on 0.1 percent. Shanghai was marginally higher while Singapore edged up 0.1 percent in Manila.
Trump and Xi are due to hold private talks Thursday on a number of issues with trade expected to be at the top of the agenda following the White House’s long-running criticism of China’s huge trade surplus with the United States. The meeting comes a day after data showed the surplus remains elevated.
Also on the radar is the fate of Trump’s tax-cut plans, with Senate and House Republicans at odds over some issues including when they should be introduced and the target for the national deficit increase.
“We are seeing parts of the package jettisoned already and overnight House Speaker Paul Ryan seemed to offer an olive branch to the Senate’s version of the plan which appears to call for a delay in the implementation phase,” McKenna said.
Despite lingering uncertainty over one of Trump’s key election pledges, the dollar held its own against its major peers.
However, Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers, cautioned: “I fear that in a desperate bid to have this pushed through, there could be risks that the policy changes being watered down further as a compromise for this (being) implemented immediately.
“The market has priced in the tax reforms influence, and delays or significant changes to the proposals will lead to a typical market tantrum.”
On oil markets prices edged up after Wednesday’s drop, which was fuelled by figures showing a rise in US stockpiles. However, tensions in the Middle East are keeping dealers on their toes following Saudi Arabia’s claim of “direct military aggression” by Iran over a Yemeni rebel missile attack near Riyadh.
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