Asian stock markets advanced on Tuesday, fueled by a positive U.S. session and a pullback in Treasury yields, which boosted the appeal of equities. The MSCI Asia-Pacific Index surged over 1%, with significant gains in Japan, Australia, and South Korea. Chinese stocks displayed mixed results, while the Bloomberg Dollar Index headed for its third consecutive day of losses, reflecting a temporary slowdown in the “Trump trade” that had previously strengthened the U.S. dollar and driven up U.S. bond yields.
The Nasdaq 100 led the way, snapping a five-day losing streak. Tesla Inc. rose by 5.6% after reports that President-elect Donald Trump’s transition team is exploring ways to relax federal regulations for fully autonomous vehicles.
“Asia’s equity markets are benefiting from the positive momentum from the U.S.,” said Frederic Neumann, Chief Asia Economist at HSBC in Hong Kong. “With U.S. interest rates edging lower, risk assets across the region are seeing some relief.”
In the bond market, U.S. Treasuries gained in Asia, with the 10-year yield slipping to 4.40%, a three-basis-point drop from the previous session. The Japanese yen strengthened against all other Group-of-10 currencies, recovering some of its recent losses. Japanese Finance Minister Katsunobu Kato indicated that the government’s stance on excessive currency fluctuations remains unchanged.
“The yen could face further pressure if the dollar continues to rise, prompting Japan’s Ministry of Finance to intervene in the foreign exchange markets,” noted Carol Kong, a strategist at Commonwealth Bank of Australia.
In political news, Trump’s transition team is reportedly considering Kevin Warsh, a former Federal Reserve governor, for the Treasury Secretary role, alongside hedge fund manager Scott Bessent for Director of the National Economic Council. According to sources, this potential pairing is seen as a move to bolster investor confidence in the U.S. government’s financial leadership.
“A more experienced leadership team could improve market sentiment, benefiting both Asian equities and currencies,” said Rajeev De Mello, a global macro portfolio manager at Gama Asset Management.
The Australian dollar climbed for the third consecutive day after minutes from the Reserve Bank of Australia’s latest meeting revealed that policymakers believe their current approach is effective in tackling persistent inflation.
In corporate news, Xiaomi Corp. saw its shares reverse earlier gains, falling by as much as 4% in Hong Kong, after the company’s strong earnings report. Investors appeared to take profits after the firm’s co-founder raised its target for electric vehicle production.
Meanwhile, U.S. equities showed modest gains, with the S&P 500 rising 0.4% and the Nasdaq 100 up 0.7%. Goldman Sachs’ Chief Equity Strategist, David Kostin, predicted that the S&P 500 would continue its upward trajectory into next year, supported by sustained U.S. economic growth and strong earnings.
Bitcoin surged above $91,000, nearing its all-time high, fueled by increasing adoption of cryptocurrency, particularly in the U.S., where Trump’s policies have been favorable for digital assets.
Oil prices remained stable after a significant surge on Monday. West Texas Intermediate crude closed above $69 per barrel, driven by rising geopolitical tensions following the U.S. approval of long-range missile use by Ukraine against Russia.
Gold prices continued their upward momentum as Goldman Sachs reiterated its forecast for gold to reach $3,000 an ounce in 2025, driven by ongoing market uncertainty.
In the tech sector, the U.S. Department of Justice is reportedly preparing to ask a judge to force Alphabet Inc.’s Google to divest its Chrome browser as part of a historic antitrust case. The department is also expected to request measures addressing AI and Android-related issues, according to sources familiar with the matter.
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