Asian stocks climbed to record highs Tuesday amid optimism on corporate earnings, following an end – for now – to the U.S. government shutdown. The dollar climbed and Treasury yields declined.
The yen fell, reversing gains, after Bank of Japan Governor Haruhiko Kuroda damped speculation policy makers are moving closer to reducing monetary stimulus. The MSCI Asia Pacific Index headed for a fresh record close, with healthcare and financial stocks outperforming.
The Taiwan dollar jumped to its strongest since January 2013. Both the euro and sterling slipped as the dollar recovered and German bund yields were little changed.
Earlier, investors scrutinized comments from the BOJ’s Kuroda that the central bank wasn’t in a position to consider exiting its current policy after the board voted 8-1 to keep interest rates and asset purchases at current levels. Inflation expectations remain more or less unchanged, versus a previous assessment that they were weakening, the BOJ said, though risks to prices remain "skewed to the downside."
Elsewhere, President Donald Trump’s signing of a temporary U.S. government spending bill Monday evening ended a three-day partial shutdown, kicking the can to Feb. 8.
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 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.
In commodities, West Texas Intermediate crude climbed toward $64 a barrel after OPEC and Russia said output cuts will continue until the end of the year.
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:
The MSCI Asia Pacific Index climbed 0.8 percent as of 4:22 p.m. Tokyo time, the highest on record with the largest increase in almost three weeks.
Topix index climbed 1 percent to the highest in more than 26 years on the biggest increase in almost three weeks.
Hong Kong’s Hang Seng Index rose 1.5 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 climbed 0.8 percent, hitting the highest in a week with the first advance in more than a week and the largest climb in 11 weeks.
Futures on the S&P 500 Index increased 0.1 percent to the highest on record.
The Bloomberg Dollar Spot Index gained 0.1 percent.
The Japanese yen fell 0.2 percent to 111.10 per dollar.
The euro dipped 0.1 percent to $1.2246.
The yield on 10-year Treasuries declined one basis point to 2.64 percent, the biggest decrease in more than a week.
Japan’s 10-year yield dipped one basis point to 0.074 percent, the lowest in more than a week.
West Texas Intermediate crude gained 0.6 percent to $63.98 a barrel, the highest in more than a week on the biggest rise in more than a week.
Gold increased 0.2 percent to $1,337.13 an ounce, the highest in a week.
LME copper gained 0.3 percent to $7,087.50 per metric ton, the highest in more than a week.