January 07, 2025 (MLN): Asian shares rose after Wall Street rallied for a second day, as Reuters reported.
The dollar narrowed losses as Donald Trump denied a report suggesting his threatened tariffs might be watered down.
Equities rose in Japan, South Korea and Australia, with futures pointing to a soft open in Hong Kong.
US contracts were steady in Asia after the S&P 500 gained 0.6% Monday and the Nasdaq 100 added 1.1%.
Nvidia Corp. hit a record high ahead of a speech by chief executive Jensen Huang.
An index of dollar strength has pared losses after Trump denied a Washington Post report that the President-elect’s aides were exploring tariffs that only cover critical imports.
The greenback fell as much as 1% Monday before narrowing the loss to 0.6%.
It edged higher early Tuesday in Asia.
Traders are gearing up for a potential increase in market volatility as Trump’s proposed policies threaten to worsen trade frictions between the US and the rest of the world.
Adding to the unease are the latest sign of US-China tensions, after the Pentagon included Tencent Holdings Ltd. and Contemporary Amperex Technology Co. in a blacklist that labeled several Chinese firms’ military entities.
“There are jitters around the yuan and that could worsen, which would sour sentiment and Trump’s recent statement reconfirming the broader tariff imposition is no doubt another source of volatility,” said Sat Duhra, a portfolio manager at Janus Henderson Investors.
“We are happy to remain underweight China here and find more comfort in ultra-cheap high yield names there that have outperformed the market.”
Treasuries were steady in Asia Tuesday after the yield on the 30-year note climbed to the highest in more than a year on Monday, while that on the benchmark 10-year paper rose three basimsgs points to 4.63%.
The yen dropped as low as 158.32 per dollar, the weakest since July 2024, as traders continued to react to strong US data released during a local holiday last week.
The currency may weaken further ahead of US jobs data on Friday, according to strategists.
The past two days’ recovery “shows just how strong the ‘buy the dip’ mentality still is,” said Mark Hackett at Nationwide.
“Investors continue to lean heavily on tech. Looking ahead, 2025 won’t be a year for easy double-digit gains by solely investing in the S&P 500.
Success in this market will require more discipline and creativity from investors.”
The Canadian dollar turned flat after advancing following Prime Minister Justin Trudeau’s resignation as head of the Liberal Party.
Friday’s report is expected to show employers tempered hiring to wrap up a year of moderating yet still-healthy labor market.
The data is unlikely to alter the view of Fed officials that they can slow the pace of rate cuts amid a durable economy and inflation that’s dissipating only gradually.
Fed Governor Lisa Cook said Monday that policymakers can proceed more cautiously amid a sturdy labor market and lingering inflation pressures.
Elsewhere, Bitcoin topped $100,000.
Oil steadied after its first drop in six sessions, as technical markers showed the recent rally may have gone too far.
Copyright Mettis Link News
Posted on: 2025-01-07T09:06:03+05:00
