SINGAPORE/NEW YORK- Bonds slipped, Japanese stocks jumped to a three-decade high and other Asian equities loitered near record peaks on Thursday as investors focused on US stimulus prospects and extended bets on global recovery and growth.
Japan’s Nikkei rose 1.4 percent to its highest point since August 1990. It is up more than 8 percent in three weeks. MSCI’s broadest index of Asia-Pacific shares outside Japan was steady and just a whisker short of Monday’s all-time high.
US Treasuries, which had climbed overnight after some reassurances that the US Federal Reserve would keep buying bonds, were sold again after CNN reported that President-elect Joe Biden is mulling a stimulus package as large as $2 trillion. The yield on benchmark 10-year Treasuries, which rises when prices fall, lifted 1.7 basis points in Asia.
Ten-year Treasury yields are up more than 19 basis points this year as investors bet on Biden’s borrow-and-spend agenda being able to clear a Democrat-controlled Congress – and as worry creeps in about when the Fed’s support might taper off.
S&P 500 futures rose 0.2 percent and EuroSTOXX 50 futures rose 0.3 percent.
“The number one question for global markets and equities will be when will the Fed start tapering,” said Frank Benzimra, head of Asia equity strategy at Societe Generale in Hong Kong. “This is where you can get some concern… but at the moment it is something that is a bit premature. We are in a context where you have growth accelerating, economic indicators are good, and in the US the increased probability of fiscal stimulus.”