TOKYO – Asian stocks hovered close to a sixteen-month peak on Tuesday and oil held near recent highs as investors found more cause for cheer over global economic prospects than reasons to worry, even as data showed risks remain.
The dollar hit a three-week high against the yen as investors continued to seek clarity on the Bank of Japan’s recent adjustment to its yield curve control and what that might mean for monetary policy.
The Aussie dollar slumped after the Reserve Bank kept rates unchanged, even as it suggested more tightening may be needed in the future.
MSCI’s broadest index of Asia-Pacific shares edged slightly higher, inching back toward the high reached Monday, which was its strongest level since April of last year.
Japan’s Nikkei provided support, gaining 0.83 percent on the back of a weaker yen.
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US E-mini stock futures also pointed to a small rise after the S&P 500 ticked up 0.15 percent overnight.
“We’re in a kind of economic nirvana, with an incredibly resilient economy, solid earnings reports and cooling inflation,” said Tony Sycamore, a markets analyst at IG in Sydney.
“A little more than halfway through the year, it feels like we’re in a very good spot.”
Signs of a peaking out in European inflation on Monday echoed the narrative in the United States, providing more evidence that the biggest central banks are nearing the end of their tightening cycles.
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However, China’s stumbling post-pandemic recovery remained in focus after a surprise contraction in manufacturing in a private-sector survey released Tuesday.
Hong Kong’s Hang Seng shed early advance to be about flat, with its property subindex flipping from gains to slide 1.47 percent as investors took profits after the previous day’s rally, built on stimulus hopes.
An index of mainland Chinese blue chips drooped 0.36 percent.
“At this point, we remain sceptical that there will be any big-bang stimulus package forthcoming,” said Alec Jin, investment director of Asian equities at abrdn.
