Asian stocks rose broadly on Friday, following Wall Street’s rise to record highs overnight, as investors digested the Federal Reserve’s message to cautiously cut interest rates, even as expects significant tax spending under new President Donald Trump.
U.S. Treasury yields hit fresh lows in Asian hours, keeping the dollar under pressure after its biggest decline against its major peers in more than six weeks on Thursday.
Asia-Pacific stocks were on course for a 3.1% gain this week, after quickly recovering from a sharp fall on U.S. election night that sparked concerns about tariffs debilitating customs regulations, particularly in China.
However, optimism over Beijing’s stimulus measures buoyed sentiment as the week-long National People’s Congress Standing Committee meeting concluded on Friday with a briefing by the responsible. Sources previously told Reuters that Chinese fiscal spending could be increased in the event of a second Trump presidency.
Mainland China blue chips were up 0.5% at 0155 GMT, following a 3% jump on Thursday. Hong Kong’s Hang Seng gained 1%.
Japan’s Nikkei added 0.25%, up 3.7% for the week.
The Australian stock index rose 1% and the Taiwanese index gained 0.7%.
World stocks, led by Wall Street, are heading for a weekly increase of 3.3% and are at a record level.
Mr. Trump returned to the White House on Tuesday, as Republicans retook the Senate and potentially increased their majority in the House of Representatives, although votes were still being counted. The result defied polls that predicted a neck-and-neck race with Democrat Kamala Harris.
Investors expect Mr. Trump to cut corporate taxes and ease regulations, which helped Wall Street’s three major indexes hit record highs on Wednesday, and the S&P 500 and Nasdaq extended these summits on Thursday, as Fed Chairman Jerome Powell hinted at continued patient policy easing. The Dow Jones remained stable.
“We think the economy and our policies are both in a very good place, in a very good place,” Mr. Powell said at the press conference after the meeting.
“We don’t know what the timing and substance of policy changes will be,” Powell added, referring to the incoming Trump administration, whose tariffs and policies analysts and investors expect will immigration rates are inflationary.
Yields on two-year U.S. Treasuries, highly sensitive to monetary policy expectations, fell slightly to 4.2119% on Friday, from a more than three-month high of 4.3120% on Wednesday.
The dollar index, which measures the currency against six other currencies, rose slightly to 104.53, but that followed a 0.7% decline on Thursday, the biggest since August 23. On Wednesday, it climbed 1.53%, its highest level in more than two years.
Markets have already passed through the ‘honeymoon period’ for the president-elect, and the dollar and US rates are now in the ‘window period’ when considering the political outlook,” said Shoki Omori, strategist head of the Japanese office at Mizuho Securities.
“The key is whether the president-elect and his team want more tax issuance next year, and market participants will again need to be attentive to social media posts from Mr. Trump that could move the market , said Mr. Omori.
Bitcoin held steady at $76,000, after rising nearly 10% this week, hitting a record high of $76,980 on Thursday. Mr. Trump has pledged to make the United States “the crypto capital of the planet.”
Gold struggled to advance after its up-and-down week, falling 0.2% to $2,701.55 in the latest session. It fell more than 3% on Wednesday, but rebounded 1.8% overnight. Last week, it hit an all-time high of $2,790.15.
Oil prices fell slightly on Friday, following gains of about 1% overnight, as the market assessed how President-elect Donald Trump’s policies would affect supplies and drillers cut production while preparing for the Hurricane Rafael.
Brent crude oil futures were down 0.22% at $75.46 a barrel, while U.S. West Texas Intermediate (WTI) crude was down 0.35% at $72.11.
